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Top 1,000 combined assurance review program for large super funds

Last updated 4 October 2022

The ATO has commenced the combined assurance review (CAR) program for large super funds.

Recently, Assistant Commissioner Nadia Alfonsi and Senior Director Blake Sly, Public Groups and International shared key messages and insights about the program in a presentation Issues for Large Funds at the Tax Institute's 2022 National Superannuation Conference.

Funds under management in the large fund sector has hit $2.4 trillion. These funds have evolved to not only play an important role in our economy as taxpayers, but also as major investors. They also act as important reporters of information which is used to administer key elements of the super system.

"It is now more important than ever that we continue to work together to provide government and community confidence that large funds are meeting their tax and reporting obligations and continue to focus our efforts on data governance," said Ms Alfonsi.

The combined assurance reviews (CARs) will continue to apply the 4 pillars of justified trust, with particular focus on governance over third-party data. The ATO will also engage with funds on their GST and member reporting obligations.

Given the importance of quality member data to the operation of the super system, the ATO will be increasing our focus on improving the quality of member data reported to us by funds.

Under the CAR program, the ATO obtains additional evidence from the Top 1,000 taxpayers to achieve greater assurance they large funds are paying the right amount of tax. The reviews also identify areas of income tax and GST risks for further action.

If a fund has been engaged through an earlier income tax streamlined assurance review (SAR), the ATO uses existing understanding of the business and seek to ‘top up’ assurance and focus on what has changed since that review. This involves assessment of any significant new transactions since then, as well as the fund's progress on tax governance.

If the ATO hasn't engaged with the fund through an income tax assurance review, the review will be more comprehensive.

If you were part of the Top 1,000 SAR program for super funds, you should review your Streamlined Tax Assurance Report, and the recommendations for future assurance. Be ready to inform the ATO of the actions undertaken to address any recommendations from the previous review and advise of any changes that have happened, with documented evidence.

If your fund is selected for a review, it's important to understand the ATO’s assurance approaches and review methodologies. You should also consider and apply any public guidance relevant to your circumstances.

It's recommended that you review your tax governance using the ATO Tax risk management and governance review guide and the Governance over third-party data supplementary guide.