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Key things to consider when choosing a Tax Accountant

Chan Naylor Team — Tue, 20 Mar 2018 00:20:29 +0000

When you’re a property investor, it’s common to work with a number of experts during the time you hold your investment. It’s likely that one of these will be an Accountant. While hiring a Tax Accountant comes with a fee, this is often a small price to pay when you think about the unforeseen and hefty taxes they may help you avoid and the strategies they can put in place to help you get the most from your investment. While there are a lot of Accountants out there, you should do some preliminary groundwork to ensure you choose the right one for you. Firstly, check they have expertise in the areas relevant to you. Your Accountant should have a good deal of experience working with other clients in the same or a similar situation to yours. This means that the Accountant has worked on complex situations before and has already been exposed to a broader set of issues relevant to your situation. You should also know the number of years the Accountant has been in the field. Ideally, you’ll want them to have at least five years of experience doing individual tax returns. It is also better if your Accountant has a certified public accountant license, even if it isn’t necessarily required. There are many Accountants who do tax work even without special training in tax, so it is preferable that you choose one with more advanced training. Experience is good but a formal education is better as this may offer a broad perspective in individual, partnership, corporate and fiduciary tax. You should also make sure that your Accountant will stand by the tax return he or she prepares for you and represent you in case of an audit. With this, the Accountant should review your past tax returns at no extra charge. This only takes a few minutes and it will demonstrate his or her willingness to serve you. An Accountant typically charges by the hour and the rate varies by location and seniority. To help lower your fees, make sure you come to any meetings organised so you spend less time with your Accountant. Use a spreadsheet or a QuickBooks file to easily show him or her your income, expenses and other relevant information. You should also pay attention to their personality and the gut feeling you get from them upon your preliminary meeting. It’s important that you feel comfortable with your Accountant as you will have to ask plenty of questions and share what is often personal information with him or her over time. Finally, have a think about location. While some investors may prefer their Accountant to be based locally, this is not a necessity anymore as you can send your documents easily via email or Dropbox. Nevertheless, if face-to-face meetings are important to you, be sure to research the location of your prospective Accountant and get an idea of what hours they are generally available to meet. If you need a reliable Tax Accountant, visit the Chan & Naylor website to learn more about our services. You can leave your details and we can schedule you in for a free consultation. Chan & Naylor Group has nationwide offices in Brisbane and Capalaba in Queensland, Melbourne and Moonee Ponds in Victoria, East Perth in Western Australia, and South West Sydney, Parramatta, Pymble, North Sydney, and Sydney in New South Wales.

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Claiming work related deductions, car and travel expenses

BMT team — Mon, 20 Nov 2017 22:07:23 +0000

A very easy way to boost your tax return refund is by taking advantage of the deductions that you can claim. When you complete your tax return, you will be entitled to claim deductions on expenses you’ve incurred, which are related directly to earning your income. If you want to claim work related deductions, the money spent from your pocket must not have been reimbursed by your employer. The expenses should be directly related to earning your income and you have a record to prove these expenses. Car and travel expenses are costs that many people claim in their tax returns but not all travel and car expenses are deductible such as travel to and from work. Properly claiming these expenses cannot only save you a lot of money but can keep you out of trouble with the Tax Office. If you use your car for work, the claimable travel and vehicle expenses are leasing, depreciation, registration costs, insurance costs and costs of running such as fuel, oil and servicing. You cannot claim expenses for your private use or those related to voluntary work. You can also claim by using the kilometre travelled for business method. The Tax Office gives you a rate that is used based on the type of vehicle you have. There are many complex deductions which you can claim to reduce your taxable income. Make sure you are claiming all deductions available to you by working with a professional that can help you maximise your tax return. What can you do? If you would like to know more about how you can protect your assets, you can click here to know more about Chan & Naylor’s services. You can leave your details here and Chan & Naylor will schedule you for a free consultation. Whether you are a beginner, seasoned investor or business owner, Chan & Naylor can give you guidance to maximise the financial areas of your life. They can give you an integrated solution of your superannuation, taxation, property investment, asset protection, estate planning and more. If you like what you are reading, you can subscribe to Chan & Naylor’s newletters at www.chan-naylor.com.au. Disclaimer

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Australian expats and foreign investors to face tax reforms and CGT exemption lift

Chan Naylor Team — Tue, 03 Oct 2017 23:54:44 +0000

Under the proposed housing affordability laws, Australian expats might see an increase in tax liability when they sell their Australian homes. While living overseas, they could lose the Capital Gains Tax (CGT) exemption on a home which used to be their main residence to give Australian buyers an opportunity to purchase properties. The reform is part of the policy changes in property investment aimed to improve housing affordability. Currently, Australian residents are fully exempt from CGT on the sale of their main residence throughout the ownership period. The capital gain is included in an individual’s taxable income and calculated as part of income tax. Australian residents are also partially exempt if the house was their main residence for only part of the ownership period. The absence rule allows them to treat a home as their main residence for CGT purposes for an unlimited period of time as long as they don’t rent it out. Meanwhile, Australians living abroad for work can qualify as non-tax residents, which removes their Australian tax liability while they live abroad. However, the new policy will no longer grant them the absence rule or offer a partial exemption for the period when their home was their main residence. Foreigners who live and own property in Australia, on the other hand, are exempt from CGT as long as they are not foreign residents when they dispose of the home. There is, however, the new ghost house levy for foreign owners of Australian property in case it is unoccupied or available for rent for at least six months of the year. Their non-final withholding tax upon disposal of a taxable Australian property has been increased to 12.5 per cent of the sale value as well. Its threshold was also lowered to $750,000. The proposed changes apply to properties bought from 7:30pm on the 9th of May 2017, while those who have purchased their properties before that would have until 30 June 2019 to sell before losing the exemption. Investors who own a home for over twelve months, which is not their main residence, get a 50 per cent deduction on their CGT as well. However, non-residents are not entitled to the discount. Others believe tax incentives are higher than incoming rent and that the housing affordability crisis will remain as long as the government does not reform the CGT exemption and negative gearing. However, some people believe the reform will only affect foreign investors who do not vote. A fairer approach could be to tax the capital gain based proportionately on the period of non-residency of the ownership period, instead of just determining whether the person is a resident or not at the time of sale. What can you do? It is important to seek professional advice in navigating the different market conditions in Australia. Chan & Naylor does not sell properties so it remains unbiased. We would love to help you whether you are a beginner or seasoned property investor. Click here to schedule a chat or call any of our local offices near you. If you like what you are reading, subscribe to our newsletters now at www.chan-naylor.com.au. Disclaimer To view the original article, click here.

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The housing market performance: 2016-2017 financial year

Chan Naylor Team — Mon, 28 Aug 2017 23:58:45 +0000

In the past two decades, there were only two years when combined capital city dwelling values fell. Last year, these values rose by 9.6 per cent which was higher than the 8.3 per cent increase recorded in the previous financial year. Combined capital city dwelling values have risen in the last five financial years but in 2010-2012, there were successive financial years when values dropped. Individual capital city growth in recent years is a different story. In Sydney, dwelling values rose by 12.2 per cent during the past financial year, its fifth successive financial year in which values increased. This value growth was greater than the 11.3 per cent growth in the previous financial year. In Melbourne, values have risen for five successive financial years, each of which saw a faster value growth rate. Last year, Melbourne values rose by 13.7 per cent which was the cities highest growth since 2009-2010. Brisbane, on the other hand, saw a 2.0 per cent growth in values last financial year, which was down from the 5.3 per cent growth recorded in the financial year prior. Brisbane’s values have risen over the last five years but the previous year was its slowest growth since 2012-2013. Adelaide also experienced a 2.4 per cent increase in values last financial year, which is slightly higher than the previous year’s 2.1 per cent growth. It also marks Adelaide’s fifth consecutive financial year in which values rose. Meanwhile, Hobart and Canberra dwelling values have both increased over the past three financial years, whereas Perth and Darwin dwelling values have dropped for the same three consecutive financial years. Factors which have influenced the rebound in capital gains last financial year included changes in investment activity following macroprudential measures from the Australian Prudential Regulation Authority (APRA) and rate cuts during May and August 2016. Investment activity across the housing market may slow further following new macroprudential policies announced in March 2017. The 2017-2018 financial year may come with lower capital gains than 2016-2017 because of higher mortgage rates and affordability constraints. For more information about property investment in Australia, contact a specialist to discuss your particular circumstances. If you like what you are reading, subscribe to our newsletters now at www.chan-naylor.com.au Disclaimer

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Property investors to benefit from tax breaks

Chan Naylor Team — Fri, 21 Jul 2017 06:44:50 +0000

Property investors usually wait for the end of financial year (EOFY) to earn money. However, relying solely on the EOFY may lead to cash flow issues. To avoid these problems, investors should know the benefits of a Pay As You Go (PAYG) withholding variation. What is a withholding variation? Under tax law, the Australian Taxation Office (ATO) may vary the amount a payer is required to withhold from a withholding payment to meet the special circumstances of a particular case or class of cases. The purpose of varying the rate or amount of withholding is to make sure that the amounts withheld during the income year best meet the payer’s end-of-year tax liability. You can request an increase or decrease in the rate or amount of withholding. If you believe your circumstances warrant a variation of the rate or amount of withholding, you will need to determine whether the variation is upwards or downwards. Tax deductions are often applied at the EOFY after you have submitted your return. A PAYG withholding variation lets property investors receive a deduction every time they are paid. They get their deduction throughout the year but have to apply every year and if they change jobs. The pending tax breaks of property investors are substantial that they sometimes can’t afford to wait until the EOFY. Many investors afford properties because of these tax breaks. Based on a case study, a $400,000 investment property will need $12,000 per year or $230 per week of pre-tax cash flow to support the property. This includes rental income, interest expense and other general expenses. Through a PAYG withholding variation, the investor would just need $4,440 per year or $85 per week to support the property, assuming all the expenses are deductible and total income is more than $100,000 with a 37 per cent marginal tax rate, excluding Medicare and other levies. The case study clearly shows that investors may benefit from an improved cash flow through a PAYG withholding variation. Once approved, the ATO will let you know your new tax rate and your take-home pay will effectively increase. It is recommended that you talk to an Accountant to prevent errors when applying for a PAYG withholding variation. This strategy helps many Australians to build up their property portfolios. For more information about taxes in Australia, contact a specialist to discuss your particular circumstances. If you like what you are reading, subscribe to our newsletters now at www.chan-naylor.com.au Disclaimer

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Tax tips for commercial owners and tenants

Chan Naylor Team — Wed, 07 Jun 2017 23:32:58 +0000

The end of the financial year is almost here so let’s take a look at some tax considerations for commercial property investors and tenants. Here are some tax tips for first time investors in commercial property and for those who have leased their first commercial premises this year. Before purchasing a commercial property you should consider the type of structure to hold the property in because it can significantly affect your tax liabilities For instance, commercial property is one of the assets which Self-Managed Super Funds (SMSFs) can hold. Remember that super funds tend to pay less tax. You should also consider how you would manage and sell commercial properties If you own one, consider requesting a Quantity Surveyor’s tax depreciation schedule which will provide you with a list of assets for depreciation purposes to maximise your deductions. When you sell a commercial property, the date of the capital gain is calculated at the date contracts are exchanged, instead of at the property settlement date (which is used for calculating tax). It is advisable to wait until the 1st of July to extend into another year. Goods and Services Tax (GST) is a concern as well A commercial property that is fully tenanted can avoid GST when buying or selling. Commercial tenants, on the other hand, should consider non-cash incentives related to the property’s fit out even if we all know that rental payments on commercial premises are tax deductible The tax outcome may be different when the assets are owned by the tenant and when owned by the landlord. If the landlord supplies fit-outs, the tenants would need to pay tax on that as a non-cash incentive and deduct the benefit. Tenants should also consider the end of the lease to avoid possible trouble down the line. Pre-payment of rent before June 30 won’t likely give the taxpayer an additional deduction because of the tax structure Keep in mind that commercial property rent is often subject to GST for over $75,000 per annum and that owners can claim capital works deductions for construction costs on an ongoing basis. When sold, owners have to lower the cost base by the amount of deductions they claimed throughout the ownership period to avoid double dipping. Documentation is very important This includes rental agreements, a Quantity Surveyor’s tax depreciation schedule, loan or debts held against a property and deduction receipts. There are repairs and maintenance that can be deducted immediately and capital improvements that are a long-term depreciation deduction. PS. Keep all invoices. Talk to your Accountant to understand what you need and map out what you want to do in the coming financial year. For more tips and advice from other industry experts, visit Chan & Naylor website, and subscribe to Chan & Naylor Newsletters.

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Home affordability – five ways Mum and Dad can help their children

Chan Naylor Team — Thu, 30 Mar 2017 23:01:35 +0000

Home affordability is the current talk of the town. How can we assist first home buyers to enter the Property Market? The “Bank of Mum and Dad” has often been referred to as a means for first home buyers to enter the market, but how can parents practically do this? There are many things parents must take into account before they would undertake such assistance, things like can my child manage his or her money? Or have they a track record in saving and budgeting? Have they a stable job? What are the implications if they have a bad relationship or divorce? It is not a straightforward decision for parents to make. Here are five strategies that Mum and Dad could consider to assist their children. Strategy one- lend the money With housing prices, so high the most difficult challenge for a first home buyer is to raise the 10-20 per cent deposit plus costs to buy their first home. If Mum and Dad are lucky enough to have some spare cash they could lend that to their children on a commercial basis, alternatively parents may have built equity in their own home and this equity is sitting in the property and not being used. They could approach the bank and unlock this equity by establishing a line of credit facility secured against the home. They could then access these funds and on-lend the deposit for the first home to their children the amount of interest you change your children could be the equivalent you are paying to the bank and the terms and conditions of this loan is totally dependent on you. In both circumstances, there should be a formal loan agreement drawn up between the parents and child and registered with the appropriate authorities and we would always recommend that a lawyer is engaged to assist. Strategy two – provide guarantees Mum and Dad may have a property or assets with a bank, they can offer these securities or guarantees to the bank limited to the amount of the deposit of the child’s new property, then the bank would lend the child the money for the property. The parents would have to provide Personal guarantees and perhaps these could be limited to the deposit. This strategy is risky in that if the child defaults on the loan the bank will come knocking on the parent’s door looking for recompense, so use this strategy only for the right type of child and use a lawyer to assist with the appropriate agreements. Strategy three -joint venture Mum and Dad may be looking to invest in property and may decide to enter into a joint venture arrangement with their child whereas the parents put up the cash for a percentage of the property and allow the child to use the property as security for them to buy their own share. The acquisition could be done as tenants in common setting out the percentage of ownership. If the child wants to acquire further interest in the property, there would be stamp duty and potential capital gain tax issues. Once again there should be documentation put in place to clearly set out agreements. If the child is living in the property appropriate rental agreements should be put in place or even consider using an agent to ensure this is managed at arm’s length. Strategy four – encourage children to move interstate Many property commentators have been arguing the fact that housing is only unaffordable in the capital city of Sydney and to a lesser extent Melbourne and if the younger generation migrated interstate to more affordable areas like Perth, Brisbane, Adelaide and the Gold Coast the prices are more affordable. Most parents want to be within reach of their children for obvious reasons, however the reality is that if they cannot afford to live in Sydney and Melbourne perhaps they should look at other states and if parents encourage that move by moral and or financial support. The strategy could be that the whole family, parents and children pack up and move interstate to be closer together and this may also help to resolve Mum and Dads retirement plans. Strategy five – earlier education is better In my view this is the most important strategy, it is not impossible to save money. Unemployment is low and the average Australian salary is quite good, however sacrifices need to be made. If Mum and Dad start teaching their children about money management early in their life this will help them manage their money and build the deposit for their first home. A lot is to do with education and mindset so encourage your children to attend seminars on money management and property, pay for their tickets and attend with them for support. In Sydney, you will need a reasonable job and to save at least $150,000 to allow you to enter the market. Four or five years of sacrifice, perhaps two jobs and tight budgeting should get the average Australian a deposit. I know of young people aged late teens who are working hard with numerous jobs and saving $30,000 per annum, so the earlier they start the better. Disclaimer: This article contains general information; before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs. Click for more detail regarding this disclaimer. Article provided by www.chan-naylor.com.au/ originally published online at www.chan-naylor.com.au/housing-affordability-5-ways-mum-dad-can-help-children-by-david-naylor/

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The eleven benefits of investing into commercial properties

Chan Naylor Team — Tue, 07 Mar 2017 04:53:24 +0000

Investing in commercial properties is not the same as investing into residential properties. There are different dynamics driving commercial properties to residential properties. Here we’ll discuss the eleven benefits of investing in commercial properties. Rental returns The rental return for owning a commercial property is generally better than residential properties and is easier to achieve a neutral return. For example, you can generally achieve a 6 per cent net annual return whereas residential properties would only achieve a 2 per cent to 3 per cent net return after deducting all the other costs such as council and water rates, repairs, land tax etc. Renting an office location versus owning one If you have a business and you are leasing an office; you’d be better off by buying your factory or office through your Self-Managed Superannuation Fund (conditions apply). Instead of paying rent to the landlord, you can effectively pay that rent back to yourself via your SMSF. Rent paid by your company is tax deductible at 30 per cent and when it goes into your SMSF it’s only taxed at 15 per cent. Capital gains are only taxed at 10 per cent. Contribution limits Where there is a limit on how much you can contribute into your SMSF as your Super contribution, there is no limit on how much rent you can pay as long as the rental price is within market rates. Depreciation value Commercial properties have much more generous depreciation rates than residential properties. This is extremely tax effective. Tax free return If you want to earn $200,000 a year (completely tax free), just buy a commercial property that has $200,000 in depreciation. Effectively $200,000 of your received rental will become tax free. Leveraging your commercial properties The ability to leverage your assets via the use of debt is an extremely effective strategy. Example, you have $200,000 cash deposit and you could borrow $400,000 at an LVR of 67 per cent you can buy a commercial property at $600,000. You now have $600,000 working for you instead of $200,000. Assume (a) capital growth is 5 per cent per annum and (b) rental return of 6 per cent per annum (c) Interest rate of 5 per cent In very broad terms the rental basically covers interest (neutrally geared in this example) and if we achieve capital growth of 5 per cent ($30,000 per annum) we are able to achieve a 15 per cent return on our cash of $200,000. ($200,000/$30,000) Caution Some properties do not achieve any capital gains including some residential properties. It’s all about property selection. Property leasing options Tenants are generally businesses and they prefer to sign long term leases such as 5 x 5. Meaning it’s signed for five years with an option for another five years. Commercial property leasing terms Many leases require the tenant to pay all outgoings so the rental received by the landlord is net. Percentage of rental increase is tied to the capital growth Many leases have clauses that give the landlord an automatic rental increase of 4 per cent per annum or Consumer Price Index (CPI) whichever is the highest. This means the capital growth of the property is also tied to the rental increases. Commercial property valuations are more clinical than residential properties In the main It’s closely tied to the rent. For example: If the rents were $60,000 per annum and the market was paying a 6 per cent return on investment it the n simply values the property at $1m ($60,000 divided by 6 per cent).However, if there was a lot of demand for the property and investors were willing to accept a 5 per cent per annum return the property value would be worth $1.2m ($60,000 divided by 5 per cent). If rents reduced to $50,000 per annum and assuming a 6 per cent return is expected than the property would have reduced in value to $833,333 ($50,000 divided by 6 per cent) If rents fell to $50,000 and returns dropped to 5 per cent per annum than the property value would have increased to $1 million ($50,000 divided by 5 per cent). As you can see it’s a lot less emotional than residential properties where residential properties are valued by comparable sales. www.chan-naylor.com.au Disclaimer: This article contains general information; before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs. Click for more detail regarding this disclaimer.

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Five reasons property is still the stand out investment

Chan Naylor Team — Mon, 20 Feb 2017 04:10:34 +0000

Here are five reasons why I think property is still the stand out investment for 2017. Interest rates still at an all-time low The word is that US interest rates will increase over the coming twelve months and Australian banks have already started to raise their rates under the guise that costs are increasing and returns diminishing to shareholders. Australian rates sit at historic lows of 1.5 per cent. Even if rates do increase along with the predicted US rates over the coming twelve months; by the end of the year they will still be low. If rates do increase, you will see an initial emotional reaction from the market, but when the dust settles investors and mortgage holders will realise that rates remain at very sustainable levels. Demand is still high, no oversupply of property in key areas Sentiment in the market is still strong with the outlook from the Developers at Stockland and Mirvac. They have been advising that while the rate of price growth will slow, pent-up demand remains strong. Mirvac’s outlook is that in the residential sector, conditions remain mixed nationally. In Sydney and Melbourne, indicators such as auction clearance rates point to solid demand supported by a competitive lending environment and increasing urban population growth. They say price growth remains positive in Sydney and Melbourne, relatively steady in Brisbane and weak to steady in Perth. According to Australia’s richest property investor and Developer Harry Triguboff, there is still a shortage of supply particularly in Sydney so demand is still outstripping supply. Banks have cracked down on property development finance which makes it more difficult for smaller Developers to access funds for a project. This means that there will be less development and inevitably less housing coming onto the market over the coming years. Bank funds readily available Banks still view residential property as a solid long term investment. Why else would they be prepared to lend you 80 per cent of the purchase price? The mortgage investment sector is very competitive with the banks flushed with funds this can only be good news for investors and rates below the advertised interest rate should be negotiated. There has never been more choice of products, interest rates and numerous banks to select from that are willing to lend against property. Long term investment We all know that you invest in property for the long term. Property is not a short-term investment due to the cost of entering the market, stamp duty, etcetera. We have seen statistics which show that over a ten-year period, property generally will double in value which equates to a capital return of 7 per cent per annum in addition to a net of 3 per cent rental return per annum that equates to a solid 10 per cent return over that period. You just need to be mindful that property works in cycles and although you may see extraordinary capital gain over a few years there will also be periods of little, zero or even negative growth. Rents are more consistent and over the longer term a combined 10 per cent return per annum is what you could expect for the right property in the right area. Negative gearing for the short term at least The federal Government has ruled out any changes to negative gearing legislation in the short term which means at least for the next couple of years property investors will benefit from the tax savings. The most important aspect of holding investments with borrowings is being able to fund any shortfall between the rent received and the cost of holding the property including the mortgage payments. The tax benefits received, assist the investor with the funding of the shortfall to hold the property longer term. You can get in touch with one of our experienced Property Tax Specialist Accountants for further information and assistance for a complimentary ten-fifteen minute phone call. Go to www.chan-naylor.com.au to contact your nearest Chan & Naylor Property Tax Specialist Accountant. Disclaimer: This article contains general information; before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs. Click for more detail regarding this disclaimer. Article originally published online at www.chan-naylor.com.au/5-reasons-property-still-stand-investment-2017/.

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SMSF – choosing the right auditor

Chan Naylor Team — Thu, 12 Jan 2017 00:56:07 +0000

It is important to ensure that service providers are aligned with your firm’s culture, values, management, staff, clients and operations, therefore there are many issues to consider when choosing a SMSF auditor. While the most common question will be in relation to price, it is definitely not the most important. The thought of having to select a new SMSF auditor for any practitioner can be overwhelming. The relationship between the SMSF auditor and accountant is a unique one that has to be built on mutual respect and professional trust. This checklist is provided as a starting point only, to which you can add your own list of customised questions to complete your due diligence. Then you will be able to make an informed choice and select the SMSF audit firm that is right for you. The following checklist should help you assess and select the right SMSF auditor. Checklist Questions/Issues: Are they in order Y/N Is your SMSF auditor registered with ASIC? Individuals are registered with ASIC, not the firm. Does the firm’s website show the names of their approved auditors? Do you know who you are dealing with? Is the person on ASIC’s banned and disqualified SMSF auditor list? Are you outsourcing audits to a SMSF audit firm who will then outsource your SMSF audits to another firm? Do your research on the firm you intend using. How long have they been operating? Who are the Directors/Principals? Do they have a good reputation? Will your SMSF audits be processed offshore? There is an obligation under APES 110 to inform clients if their work is not processed in Australia. This responsibility should be addressed in the initial terms of engagement letter between the client and the Accountant. Will you have to reissue a terms of engagement letter to your client? Do you have to email your documents to the firm? Does the firm have systems in place to ensure your information remains confidential? Does the SMSF audit firm provide access to an audit portal or client portal? Do you know in which country your client’s confidential information is being held or transited through? How secure is the portal? What platform is used to receive and store documents? Cloud-based systems have been hacked several times over the past couple of years – is your client’s sensitive financial information secure? Does the firm have an outsourcing agreement? The agreement should set out the firm’s approach to providing their services and should be developed in accordance with APES 110, APES 320 & APES 325. Will they provide an SMSF audit checklist? Do you know what documents are required for the audit? Is there a record of documents already provided and/or uploaded to the portal? This can save a lot of time and discussion between parties if there is a breakdown in the audit process. What is the turnaround time to complete work? Are they proactive or reactive to your practice’s workflow requirements? What is the turnaround time during peak periods? Will you miss your lodgement deadline? When you provide fund documents, are you emailed back a signed audit report almost immediately? As there will almost always be additional documents required for the audit, this may indicate that the audit is not being undertaken in line with professional standards and legislation. Are management letters provided? Best practice is that a management letter is always provided, even if there are no additional comments addressed to the trustees. Do they provide SMSF technical advice and assistance? Does the firm provide SMSF advice that will assist in rectifying breaches? Do you have to pay extra for this service? Is the firm a dedicated SMSF audit firm? Do they provide any other services? Will independence be an issue? Are property title searches undertaken annually? This confirms that the trustees have been correctly registered on the title and also ensures that there are no mortgages or encumbrances on the property. Are bank audit certificates obtained? What if the cash component is material? Once again, confirmation of correct title ownership is important, which may not be shown by the bank statements alone. BACs can also highlight other issues, such as whether there is an encumbrance or lien on the investment, whether the bank account went into overdraft, etcetera. If you would like to know more about how Chan & Naylor Audit Services can help you and your business, please go to the Chan & Naylor website and ask for a FREE ten minute phone call with one of our Auditing Team. Alternatively please call 1300 250 122.

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