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SMSF Auditors Professional Association Stakeholder Group key messages 15 June 2022

Key topics discussed at the SMSF Auditors Professional Association Stakeholder Group meeting 15 June 2022.

Last updated 25 July 2022

Technical discussion on market valuations

The discussion followed feedback on the practical application of the ATO’s market valuation guidance. It covered a range of issues that included:

  • requirements of Regulation 8.02B and Auditing Standard ASA 500 Audit Evidence
  • challenges faced by auditors in obtaining appropriate audit evidence to support trustee rationale for determining the market value of each asset (or class of asset), particularly about comparable sales for commercial property
  • external market valuations and how frequently they are conducted
  • kerbside valuations and valuation ranges
  • funds in accumulation phase verses pension phase
  • risk based approaches adopted by auditors for valuations.

Members raised an issue about the timing of ATO guidance and the impact that it has on auditor practices for a specific year.

Action item

Web guidance on market valuations

Due date

August 2022



Action item details

ATO to review the current wording of its web guidance on market valuations to identify whether further clarification can be provided on:

  • when an external market valuation would be appropriate
  • the role of auditors in applying professional judgement when considering evidence which has been provided to substantiate a market valuation.

Compliance and engagement program

The ATO’s Compliance and Engagement Program update included the following key observations:

  • The return of ATO resources to our compliance program post the Covid-19 disruption has led to an increase in the completion of more audits and resulted in an increase in Australian Securities and Investments Commission (ASIC) referrals.
  • The transition to the use of Online services for business by auditors for lodging auditor/actuary contravention reports (ACRs), audit complete advices (ACAs) and professional to professional (P2P) enquiries is working effectively.
  • There has been a noted increase in ACRs reported for the 2021–22 financial year
  • Web content for auditors on SuperStream is expected to be published shortly.
  • We are at the compliance treatment stage of our SMSF auditor number (SAN) misuse strategy for the 2020–21 financial year. Correspondence was recently issued to 683 tax agents who had misreported SANs.

Upcoming work includes:

  • The finalisation of our SMSF auditors compliance program for the 2022–23 financial year.
  • Web material is being developed on cryptocurrency (crypto) to help support auditors who are now becoming more exposed to this asset class.
  • The SAN misuse mailout for the 2021–22 financial year will issue late in the 2022 calendar year.
  • SMSF statistics for 2021 SMSF annual return (SAR) lodgments will soon be published.
  • SMSF auditors communications survey which is expected to issue to all auditors in September 2022.

Other relevant matters discussed included:

  • Some members noted more ACRs were being lodged because of an increase in Part A qualifications. These are more likely to be due to insufficient evidence to support the market value of unlisted assets rather than insufficient evidence in relation to opening balances.
  • Other auditors considered ACR lodgments were increasing because of the $30,000 financial threshold for reporting.
  • Concerns were raised about tax agents receiving year on year ACR letters requesting that the contravention is rectified in circumstances where, for example, the contravention relates to insufficient evidence to support the market value of unlisted assets.

Compliance and engagement case outcomes included:

  • A total of 41 SMSF auditor case cases were completed during the period 1 July 2021 to 26 April 2022. Of these, 11 were part of the Top 100 program and 30 were part of the High risk auditor program.


Top 100

High risk



Referral to ASIC





Voluntary cancellation





Education outcome





No further action required





  • Our SAN misuse mailout in September 2021 included the issue of lists to auditors of all audits reported to have taken place between 1 July 2020 and 30 June 2021 and excluded funds for which an ACR or ACA had been received.




Auditors that reported SAN misuse



Funds with reported SAN misuse



Trustees connected to SAN misuse



Tax agents connected to SAN misuse



Tax agents connected to one instance



Tax agents connected to 2 to 5 instances



Tax agents connected to more than 5 instances



  • Serious instances of SAN misuse detected through mailouts sent in earlier years continue to be treated through case work. 35 SAN misuse cases have been completed so far this financial year.
  • Since March, our preferred channel through which to receive P2P queries is the online services to business messaging tool. 33 P2P queries have been completed so far this financial year.

Action item

Auditor contravention reports

Due date

August 2022



Action item details

ATO to consider the appropriateness of the reporting criteria under Test 7 and our correspondence in relation to year on year contraventions.

Australian Securities and Investments Commission

ASIC has recently issued a publication on crypto as well as 3 other media releases specific to SMSF auditors as follows:

  • ASIC has accepted voluntary cancellations or imposed conditions on the registration of 18 SMSF auditors involved in reciprocal auditing arrangements
  • actions taken against another 19 SMSF auditors
  • work in progress to get all auditor annual statements up to date.

Further, the current regime which involves co-regulation of SMSF auditors, is 10 years old and is under internal review. The ASIC competency standards for auditors are also subject to review. Stakeholders may be contacted for feedback in the future as part of a public consultation process.

Auditing and Assurance Standards Board

The Auditing and Assurance Standards Board (AUASB) update included:

  • The post implementation review of the Standard on Assurance Engagements ASAE 3100 Compliance Engagements has not resulted in any major feedback from stakeholders and as such the AUASB agreed that no standard setting activities will be pursued at this time.
  • Systems of quality management in compliance with ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements are required to be designed and implemented by 15 December 2022, and the evaluation of the system of quality management is required to be performed within one year following 15 December 2022. Chartered Accountants Australia and New Zealand has released a tool kit available to assist auditors with implementation especially those in small or medium sized firms
  • The International Auditing and Assurance Standards Board (IAASB) is making changes to the international standard on Audit Evidence ISA 500. The Auditing and Assurance Standards Board (AUASB) is considering the impacts on the Australian Auditing Standard.
  • ASA 500 Audit Evidence. An Exposure Draft is likely to be released by the IAASB in September and the AUASB will undertake some Australian outreach in October 2022. The AUASB will provide an update at the next meeting.

Other business

The existing SMSF Independent Auditor’s Report form (NAT 11466) will not be changed and can continue to be used for audits completed on or after 1 July 2022.

Due to time constraints, the ATO Top 100 auditor program findings agenda item will be carried over to the next meeting.

The next meeting is likely to be held via Webex due to ongoing uncertainty around Covid-19 in August 2022.