Question

Comment on the following statement regarding whether you agree with it and why.

Accountants make fees from helping to administer an SMSF. Consequently, an accountant providing advice has a potential conflict of interest. That is, the advice is not independent – and this exposes the client to risk.

Answer 1

SMSF- Self Managed Super Funds

Role of accountants in helping to administer an SMSF:

• Fund Accounting services
• Fund Administrative services
• Fund Advisory services
• Fund Audit services

Fund Accounting Services

These services include preparation of Financial statements using the knowledge of Accounting standards applicable to SMSFs , these service require complete details of books of accounts of the client.

Fund Administrative Services

These includes services which are required to manage the Funds, in many companies these funds are administered by different administrators while in some places they are administered by the Accountants however accountants cannot take part in recommending on the Investment process unless that person is qualified under the provision of the FSRA (Financial Services Regulatory Authority)

Fund Financial Advisory services

The advisor may be the same person providing the accounting & as well as administrative services although he must be licensed under the provisions of FSRA (Financial Services Regulatory Authority). He may advice the trustees on their SMSF operations, draft Fund's Investment strategy, make investment recommendations, prepare Investment related documents and Investment monitoring services.

Accountant charges fees for the above mentioned fees but he is authorized to performed the above services and thus he is bounded to follow his ethics , and thus he advices for the benefit of his client not for his personal interest. His advice is not influenced by the fees charged by him as merely profit making is not a motive of a professional accountant.

Although some unlicensed accountants lure their clients into activities just in order to charge fees from them and as a result exposing them to risks.