Why a trustee representation letter is important?

Checking compliance

Self-managed super funds (‘SMSFs’) are entitled to tax concessions on their investment income but only if they comply with the Superannuation Industry (Supervision) Legislation. This includes being audited each year by a registered SMSF auditor.

Under the Guidance Statement GS009 Auditing Self-Managed Superannuation Funds, SMSF auditors are required to undertake a financial and compliance audit of the fund.

The Superannuation Industry (Supervision)  (‘SIS’) Legislation requires the fund’s trustees to provide the SMSF auditor with any necessary documents to conduct the audit, and if the SMSF auditor requires further information, according to section 35C(2) of the SIS Act, trustees must provide that information within 14 days after receiving the written request from the auditors.

One of the documents that the SMSF auditor will request from the trustees is a trustee representation letter. The trustee representation letter is a written confirmation from the trustees that the financial statements and other documentations presented to the auditor are sufficient and appropriate and there are no material transactions that have not been properly recorded in the accounting records underlying the financial report. It also confirms that the trustees have complied with their legal and ethical obligations regarding the Fund.

Therefore, the trustee representation letter is an essential document required for every audit under Australian Auditing Standard (‘ASA’) 580 and it forms part of the audit evidence.

Where the trustees choose not to sign a representation letter as they do not agree with what the letter says, the ASA 580 requires auditors to re-evaluate the integrity of management and evaluate the effect this may have on the reliability of representations and audit evidence in general. The Standard also requires auditors to determine the possible effect of an inability to obtain sufficient appropriate audit evidence to form an opinion in the audit report.

In terms of compliance to SIS Legislation, the SMSF auditor signs off on certain SIS Legislation sections based on the trustee written representation letter as a critical audit evidence. A few sections that auditors will rely on within the trustee representation letter are:

  • The SMSF continuously meets the definition of SMSF;
  • The trustees are not disqualified; and
  • The trustees keep accounting records for at least 5 years as well as keep the minutes and records of meetings for at least 10 years.

The letter is also a good reference guide of the SIS Legislation to the trustees and can be used as a compliance reminder.

As mentioned earlier, the trustees are required to provide auditors with documents requested within 14 days. Failure to provide the same within the 14 day period can result in an audit contravention report as well as a qualified opinion or a disclaimer of opinion on the basis of a limitation on the scope of the engagement.


Reliance Auditing Services is a specialist independent auditing services firm providing quality audits to SMSFs, companies, not-for-profits and AFS licensees all over Australia. Reliance Auditing places a huge emphasis on educating our clients to ensure they fulfil their reporting obligations.

Call: 1300 291 060
or email us at info@relianceauditing.com.au

DISCLAIMER: This information is an interpretation of rules, regulations and standards. It should not be considered as general or specific advice and neither purports, nor is intended to be advice on any particular matter. No responsibility can be accepted for those who act on the contents of this publication without first obtaining specific advice. Liability limited by a scheme approved under Professional Standards Legislation.