SMSF practitioners with clients who hold assets that may be hard to value should consider having a discussion with them prior to passing their files on to the fund’s auditor to prevent an adverse outcome, according to an SMSF accountant.
Vincents superannuation advisory director Mailene Wheeler noted her firm often finds difficulties with valuations for investments in unlisted trusts or companies, but does not want to pass that issue on to the auditor.
“We try to not make our auditor be the bad guy. We want our clients to be open with us and have discussions so we can have discussions with our auditors on transactions,” Wheeler told delegates at The Super Playbook 2025 event, co-hosted by the Institute of Financial Professionals Australia and The Auditors Institute in Sydney last week.
“It’s been a case of re-education with our trustees and telling them before they get into these investments there are requirements to record it at market value, that it’s a cost for your SMSF and it must be an arm’s-length transaction, and hopefully it’s unrelated parties.”
Wheeler recognised despite this, some SMSFs will no longer receive updates on the value of their holdings where financial statements are supplied and they are unsigned or in draft form only, or the accountant of the entity is unwilling to provide financial statements to the fund.
“When we run into these challenges, we’re trying to weigh up what are we going to do,” she added.
“What we look at doing is having a pre-audit discussion before we even get to the audit and state: ‘This is the information that we have. Will you accept this?’
“We also ask if we could revise the asset to nil because we’ve done a company search and we’ve made a genuine effort and there is no information.
“We are looking at what do you as auditors accept because we’re leaning towards a nil valuation or we’re leaning towards something else.
“So while part of the problem is getting the information, the other part is how do we solve this. How can we assist the client and how can we work with the auditors so that we’re not going back and forth?”
