#10135
Awan Hammad
Participant

    Hi Kylie

     

    I assume the company that was lent to is not a related party.

    Yes section 109 of SIS needs to be considered re whether it was an arm’s length transaction. It is noted that the loan may not be collectable. I would review how the trustees came to this conclusion and what action has been taken by them to enforce the debt and the terms of the debt. I would request more information from the trustees re why they made the investment and what they have done to collect the loan. This will determine if there has been a breach of section 109.

    As auditor you would also want to check compliance with:

    1. Section 62 – sole purpose test

    2. Regulation 4.09 – investment strategy allows for the investment

     

    Thanks

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