When SMSF Auditor conducts audit it is often asked why recent title search is required when Rate Notices, Water bills have name of the owner on it ?
Following are the reasons:
- Title search is accepted form of audit evidence to confirm ownership by the fund under Australian Auditing Standards.
- We have seen similar entities names of related parties appearing on Title Search those have nothing to do with SMSF.
- Title search reveal any charge, caveat, interest registered on it. Which Rate notice or utility invoice can not provide.
- Utility invoice can be held under anyone receiving those services ie. Tenant. Which is the reason Utility invoices can not be taken as audit evidence of ownership of assets.
- When LRBA loan is paid in full, mortgage needs to be discharged and title needs to be transferred to the fund ie. Corporate Trustee or trustees’ names as trustee for the fund. Only Title search can provide this information.
- When professional body, peer review and, ATO conducts our audits, they expect recent title search around the time audit was conducted in our audit file.