“Every year, trustees must value the assets of their SMSF at market value when preparing financial statements and accounts. Our valuation guidelines for self-managed super funds provide advice to trustees when valuing assets,” the Australian Taxation Office (ATO) said.

“Auditors play an important role in verifying the market value of fund assets. They must obtain evidence to support the valuations as part of their audit. If the evidence doesn’t support that the valuation is at market value, the auditor should consider modifying their opinion in the independent auditor’s report and lodge an auditor contravention report (ACR), if the reporting criteria are met.”

Last year, the ATO analysed its own data and identified more than 16,000 SMSFs that reported assets such as property and unlisted trusts at the same value for three consecutive years. There were over 1,000 auditors involved in the audits of those SMSFs.

In March and April 2024, the regulator contacted those SMSFs and auditors to remind them of their obligations and then checked the value of the assets reported to it when those SMSFs lodged their next SMSF annual return.

It found that 80 per cent of the SMSFs updated their property valuations, but only 48 per cent updated the unlisted trust valuation.

Where valuations were not updated and ACRs were not lodged, the ATO commenced reviews on those auditors involved and asked for the evidence used to verify that the assets were valued at market value. In all cases finalised so far, it found the auditor didn’t obtain sufficient evidence to verify the market value.