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  • The SMSF auditor and verifying market values in an SMSF

    Two recent cases involving SMSF auditors, Cam & Bear Pty Ltd v. McGoldrick [2018] NSWCA 110 and Ryan Wealth Holdings Pty Ltd v. Baumgartner [2018] NSWSC 1502, highlighted the obligation of SMSF auditors to verify asset values in the financial statements.

    Under regulation 8.02B of the Superannuation Industry Supervision Regulations 1994 (SISR), assets must be valued at market value in the SMSF’s accounts and statements.  SMSF auditors need to obtain sufficient appropriate audit evidence from SMSF trustees to verify the value of a fund’s investments. It is not the auditor’s job to undertake a valuation but they should seek evidence that shows how the asset was valued, including the method used and the data relied upon.

    If the auditor is unable to obtain sufficient verification that material assets are valued at market value, they should qualify the financial and compliance report sections of their SMSF Independent auditor’s report stating they have been unable to obtain sufficient appropriate audit evidence to verify the asset values. They should also lodge an Auditor/actuary contravention report for the contravention and notify the trustees in a management letter.

    The most common contravention not identified or reported by auditors who were referred to ASIC this year, was regulation 8.02B. 

      Last modified: 18 Dec 2018QC 57668