An ATO compliance program aimed at reviewing SMSFs with unchanged asset valuations is causing confusion for some auditors working in the space because they are uncertain which funds are under scrutiny.
The ATO has recently put SMSF auditors and trustees on notice through a targeted mail-out campaign warning of potential audits by the regulator for those that have not updated their asset valuations in a fund’s annual return for several years.
Tactical Super director Deanne Firth said she was one of more than 1000 SMSF auditors who received a letter in relation to the program, but was unsure how to proceed because it did not specify which funds were at risk of being examined by the ATO.
“If you want a list of the funds that relate to the letter, the ATO will not provide this information to you. This is really frustrating as it would make it so much easier to know which funds the ATO are concerned about,” Firth noted during an Institute of Financial Professionals Australia webinar today.
“My preference would be that the ATO had given me a list of funds and then asked me to explain why those assets were valued at the same value for multiple years.
“Essentially they’re saying you’ve done the wrong thing, but I can’t explain why unless I get a full ATO audit and nobody wants the time and the stress of a full ATO audit.”
She suggested auditors are responsible for identifying any funds that may need to reassess their asset valuations, however, noted this approach had yielded mixed results.
“The only way to do it is to try and work it out for yourself. You can ask your software provider to run a list of funds with the same comparative figures and check every file used on that list to ensure the valuation evidence is robust and you have sufficient audit evidence for valuations,” she said.
“I also spoke to our audit work papers company and they were able to run a list of any funds that had assets the same value for three consecutive years.
“I called some of the funds on that list and they all said that they didn’t get a letter. So I’m a little bit perplexed as to what funds the ATO is talking about.”
