The ATO has published an article reinforcing the need for auditors to verify asset values in the financial statements of an SMSF.
In the note, the regulator emphasises the need for SMSF assets to be valued at market value in the financial accounts of the fund in accordance with regulation 8.02B of the Superannuation Industry Supervision Regulations 1994.
It is pointed out the role of the auditor is not to perform a valuation for the fund.
“SMSF auditors need to obtain sufficient appropriate audit evidence from SMSF trustees to verify the value of a fund’s investments,” the ATO said.
“They should seek evidence that shows how the asset was valued, including the method used and the data relied upon.”
The ATO stipulated under the regulation an SMSF auditor needs to qualify the financial and compliance sections of the independent audit report, reflecting the fact they were unable to obtain sufficient verification the material assets of a super fund are valued at market value.
“They should also lodge an auditor/actuary contravention report for the contravention and notify the trustees in a management letter,” the regulator said.
The article was issued after problems with auditor responsibilities involving the valuation of SMSF assets were highlighted in two recent court cases – Cam & Bear Pty Ltd v. McGoldrick [2018] NSWCA 110 and Ryan Wealth Holdings Pty Ltd v. Baumgartner [2018] NSWSC 1502.
In addition, the ATO revealed contraventions involving regulation 8.02B were those most commonly not reported by auditors who were referred to the Australian Securities and Investments Commission in 2018.
