FirmHello
Tour Who it's for Features Security Pricing About
AU AUD

Currency and local tax terms

United States USD Canada CAD United Kingdom GBP Australia AUD
Get started
For approved SMSF auditors

An SMSF audit engagement letter for both halves of the audit

An SMSF audit is two engagements under one letter: a financial audit and a compliance engagement. The letter has to set out the terms of both, and what the auditor must report whether the trustees like it or not.

Each year the trustees of a self-managed super fund must appoint an approved SMSF auditor, no later than 45 days before the annual return is due, and the audit must be finished before that return is lodged. The auditor's report is in the ATO's approved form: Part A, the financial audit under Australian Auditing Standards, and Part B, the compliance engagement under ASAE 3100.

Free download

SMSF audit engagement letter

The full letter in Word and PDF for Australian SMSF auditors, covering Part A, Part B, independence and reporting to the ATO.

Download the PDF Download for Word

No email required.

Use the free engagement letter generator

Type in your firm, the client, the scope and the fee, and it writes a complete engagement letter for Australia, ready to print or save as a PDF. Nothing you type is stored.

Next step: send it to the client through FirmHello, where it stays on their record beside everything else they send you.

Get started

The engagement letter is where the trustees learn the parts they tend not to expect — that you can ask for any relevant document and they must provide it within 14 days, that some contraventions go to the ATO whatever they say, and that your independence limits what else your firm can do for the fund.

What an SMSF audit letter has to cover

ASA 210 sets the terms any audit letter must state. An SMSF letter adds the compliance engagement and the obligations the SIS Act puts on both sides.

  1. 1

    Both engagements, and their standards

    The objective and scope of the financial audit under Australian Auditing Standards, and of the compliance engagement under ASAE 3100, including the SIS Act sections and regulations Part B of the report covers.

  2. 2

    What the trustees are responsible for

    Keeping the fund's records and preparing its financial statements, complying with the SIS Act and Regulations, valuing assets at market value under regulation 8.02B, allocating investment returns fairly, and giving you the documents you ask for within 14 days.

  3. 3

    What you must report, and to whom

    A possible contravention must be reported to the trustees in writing, and to the ATO in an auditor contravention report where it meets the ATO's reporting criteria. The trustees cannot waive that, and the letter should say so before it happens.

  4. 4

    Independence, stated plainly

    Name any other services your firm provides to the fund. An auditor cannot audit a fund for which the firm has taken on any management responsibility, and can prepare its accounts only where the work is routine or mechanical from records the trustees have approved.

  5. 5

    The form of the report

    The independent auditor's report in the ATO's approved form, with Part A and Part B, one report for each year audited, and a management letter for matters the trustees should know about.

The SMSF audit engagement letter

Written for Australia. The downloads are the same text, as a Word document to edit and a PDF to put on your letterhead.

[Firm letterhead]

[Date]

The Trustees, [Fund name]
[Address]

Dear Trustees,

The engagement

You have appointed us as the approved SMSF auditor of [Fund name] for the year ending 30 June [year]. This letter sets out the terms of that engagement, which has two parts: an audit of the fund's financial report, and an engagement to report on the trustees' compliance with the provisions of the Superannuation Industry (Supervision) Act 1993 and Regulations specified in the ATO's approved form of auditor's report.

Part A — the financial audit

We will conduct the audit in accordance with Australian Auditing Standards, with the objective of expressing an opinion on whether the financial report is presented fairly, in all material respects, in accordance with [the basis of accounting described in the notes]. Because of the inherent limitations of an audit, there is an unavoidable risk that some material misstatements may not be detected.

Part B — the compliance engagement

We will conduct the compliance engagement in accordance with ASAE 3100 Compliance Engagements, with the objective of expressing an opinion on whether the trustees have complied, in all material respects, with the specified provisions for the year. Our procedures are designed to give reasonable assurance and will not necessarily detect every instance of non-compliance.

Your responsibilities as trustees

You are responsible for keeping the fund's accounting records and preparing its financial statements; for such internal control as you determine is necessary; for complying with the SIS Act and Regulations, including valuing the fund's assets at market value and allocating investment returns to members on a fair and reasonable basis; and for giving us access to all information relevant to the audit.

Under section 35C(2) of the SIS Act, you must give us any document relevant to our report within 14 days of our written request. Before the audit begins you will give us the fund's operating statement and statement of financial position. At the end of the audit we will ask you to confirm certain matters in a written representation letter.

Our reporting obligations

If we form the opinion that a contravention of the SIS Act or Regulations may have occurred, may be occurring or may occur, we are required to tell you in writing, and to report it to the ATO in an auditor contravention report where it meets the ATO's reporting criteria. If we form the opinion that the fund's financial position may be, or may be about to become, unsatisfactory, we must tell you and the ATO. These obligations continue even if this engagement ends before the audit is complete.

Independence

We are required to be independent of the fund under APES 110 Code of Ethics for Professional Accountants (including Independence Standards). [Our firm provides no other services to the fund. / Our firm also provides [describe services] to the fund. You confirm that you make all decisions about the fund, and that you approve the coding of transactions and the trial balance from which the financial statements are prepared.] If our independence cannot be maintained, we will decline or end this engagement.

What is not included

This engagement does not include preparing the fund's financial statements or annual return, calculating tax or members' balances, the Division 296 calculations, or advice on the fund's investments or strategy.

Our report

We will issue an independent auditor's report in the ATO's approved form, with Part A and Part B, for each year audited, and a management letter setting out any matters we believe you should know about. The form and content of our report may need to differ from this if our findings require it.

Access to our working papers

Our audit working papers may be reviewed by the ATO, ASIC or our professional body as part of their oversight of SMSF auditors.

Fees

Our fee is [amount] plus GST, invoiced [when], payable within [number] days. Additional work caused by incomplete records or late responses is charged at [rate] per hour, and we will tell you before we incur it.

Agreement

This letter remains effective for future years unless it is terminated, amended or replaced. Please have each trustee, or each director of the corporate trustee, sign and return a copy.

Yours faithfully,
[Name], Approved SMSF auditor, SAN [number]

Agreed by the trustees of [Fund name]:

Signature ______________________ Date ____________

Before you use this

Supplied as-is, with no guarantee. These templates are general information, not legal advice, and not a substitute for it. Have your own legal adviser review and adapt one to your practice and your jurisdiction before you put it in front of a client. FirmHello accepts no responsibility or liability for any use made of them.

Where SMSF audit engagements go wrong

The documents that never arrive

The trustees supply half the bank statements and a valuation from two years ago. The 14-day rule is in the Act; putting it in the letter makes it a term they agreed to.

The contravention the trustees thought was private

A loan to a member is repaid in May and the trustees ask you to leave it out. The letter already told them you could not.

The accounts your firm also prepared

Your firm codes the fund's transactions and builds the ledger, then audits it. That is not routine or mechanical, and the ATO's independence reviews look for exactly that arrangement.

Related letters

Management representation letter Management representation Audit Audit Accounting Accounting Template and samples Templates

Questions about SMSF audit engagement letters

Does an SMSF audit need a new engagement letter every year?

Not necessarily. ASA 210 lets a letter continue for recurring audits, but the auditor must consider each year whether the terms need revising. Issue a new one when the trustees change, the fund changes significantly, or the rules change — and Division 296, which applies from 1 July 2026, is a reasonable prompt to do so.

When must the auditor be appointed?

No later than 45 days before the date the fund's annual return is due, under regulation 8.02A. The audit itself must be finished before the return is lodged.

Can my firm prepare the accounts and audit the fund?

Only if the accounting work is routine or mechanical — posting transactions the trustees have coded, or preparing statements from a trial balance they have approved — and any remaining threats are addressed. If the firm takes on any management responsibility, it cannot audit the fund at all.

Does the audit cover Division 296?

The audit tests market valuations and the allocation of earnings, which the Division 296 calculation relies on, but the calculation itself is not part of the audit. Say so in the exclusions.

What changed

  • Added an editable Word (.docx) copy of the letter beside the PDF.
  • Listed the management representation letter first under related letters.

The letter is the easy half

Sending it, getting it back signed, and finding it again in two years is the half that eats the week. That is what the portal is for.

No card and no sales call. If you would rather tell us about your firm first, use the longer form.