The biggest audit risk for 2017 is the undervaluation of assets in an SMSF, according to a superannuation specialist.
“Most people will want to push asset values down and there is huge pressure to do that in order to get under the $1.6 million cap,” BDO Australia superannuation partner Shirley Schaefer told the Institute of Public Accountants 2017 National Congress on the Gold Coast last week.
“But if you’re undervaluing assets, that’s the biggest risk.
“If the valuation is down by 10 per cent or more, it will be called into question.
“Why a 10 per cent threshold? Because according to auditing standards, anything above that is a material difference.”
Schaefer also warned the valuation issue was on the regulator’s radar.
“The ATO has said they will absolutely look at this, subject to review,” she said.
“What that means is trustees might need to gather further information or documentation supporting how you got there [to that value].
“And you need to push this back on the trustees [as part of their duties and responsibilities].”
In October, ATO SMSF segment assistant commissioner Kasey Macfarlane announced the regulator would be monitoring changes in behaviour in relation to SMSF asset valuations as a result of the superannuation changes.
“Where we see significant reductions in asset valuations in SMSFs, particularly if coincidentally it puts somebody just below a particular cap or limit, then that will attract our close scrutiny,” Macfarlane said at the time.
She pointed out the tax office’s regularly published valuation guidelines still applied in the context of the new measures and the guidelines themselves had been updated to reflect the recent changes to the super system.
