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 Australian Securities Investment Commission (ASIC) this year, was regulation 8.02B.