Auditors are bearing the brunt of the work in informing SMSF trustees that tighter rules apply to the valuation of assets in place of the ATO communicating those changes, according to an SMSF audit firm.
Baumgartner Super director David Burrows said while new guidelines for trustees on how to value an asset inside an SMSF were released by the ATO in June 2021, trustees were becoming upset with auditors over the changes.
“The ATO has to get the message out that the revised valuation rules are ATO guidelines and not auditors’ rules that we are applying,” Burrows told selfmanagedsuper.
“The guidelines are for trustees because the ATO found auditors were reporting deficient valuations by them and so they have attempted to fix those valuations by changing the asset valuation model.
“As a result of this, auditors are now having to tell accountants and trustees more work needs to be done, which is leading to more dialogue and questions.”
He said the dropping of kerbside valuations for property in place of comparable sales prices has created problems as SMSFs with residential property seek that information online and those with commercial property now have to seek paid valuations if unable to find comparable sales data.
The change had resulted in longer audits and more requests for information from accountants and trustees and potentially more cost for SMSF clients, he added.
“Auditor costs have not gone up yet as we are wearing the time cost at present,” he said.
“The industry will adapt to the work, but at the moment we are undertaking the education angle for trustees, like we did with investment strategies, and some will comply and some will not, which makes it hard for the audit sector.
“If the valuation evidence is not provided, we will continue to issue audit contravention reports, but are unsure what the ATO will do if inaccurate valuations remains as an ongoing issue.”
