SMSF auditors should pay careful attention to ASIC\u2019s surveillance report into the financial reporting and audit of registrable superannuation entities, a leading accounting association has warned.<\/p>\n
The Chartered Accountants Australia and New Zealand (CA ANZ) said the surveillance report has paid particular attention to valuing unlisted assets and that these are common in SMSF portfolios.<\/p>\n
Amir Ghandar, reporting and assurance leader at CA ANZ, said valuing these assets frequently involves complex judgement calls that can have significant implications for member outcomes.<\/p>\n
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\u201cASIC\u2019s report rightly acknowledges the importance of high-quality auditing and financial reporting to the integrity of Australia\u2019s superannuation system,\u201d Ghandar said.<\/p>\n
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\u201cRobust reporting is essential and, when it comes to valuing complex assets, results matter \u2013 not just the effort \u2013 which is why finding the right balance is crucial.\u201d<\/p>\n
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In its report, the Australian Securities and Investments Commission (ASIC) stated it found superannuation trustees and auditors should be doing more so that valuations of assets in financial reports are reliable and give members confidence in their investments.<\/p>\n
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\u201cFrom our review of financial reports, we found RSEs took different approaches when categorising unlisted investments, often with limited disclosure about their approach. As a result, it was difficult for a user to compare investments between RSE financial reports, or to understand how much they could rely on those valuations,\u201d it said.<\/p>\n
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\u201cWe are of the view that auditors are not doing enough to obtain sufficient audit evidence that provides reasonable assurance about investment valuations in the RSE financial reports.\u201d<\/p>\n
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Furthermore, it stated that auditors also did not adequately challenge the valuations provided by external fund managers.<\/p>\n
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Shelley Banton, director of Super Clarity, told SMSF Adviser that there is a \u201ccommonality of theme\u201d in terms of SMSF auditors not having sufficient, appropriate audit evidence for market valuations.<\/p>\n
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\u201cWe\u2019re already seeing a lot of auditors being referred to ASIC, and the main reason is for a lack of audit evidence,\u201d Banton said.<\/p>\n
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\u201cIt does relate to market valuations and that commonality that exists between auditors of SMSFs and auditors of APRA funds, where they do need to get a deeper look into the methodology that\u2019s been used to make sure they understand what they\u2019re using actually reflects what\u2019s fairly stated in the financial statements.\u201d<\/p>\n
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Banton continued that it can become a \u201ccatch-22\u201d situation for auditors.<\/p>\n
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\u201cIt\u2019s up to auditors to understand what [trustees] have used [to come up with a valuation], how they\u2019ve used it and the way in which they\u2019ve used it to get to that market valuation. If we can\u2019t do that, we\u2019ve got to ask for more information,\u201d she said.<\/p>\n
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Ghandar added ASIC\u2019s guidance is helpful, but trustees and auditors still need to use their judgement to focus on what matters most at year end.<\/p>\n
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\u201cThe report is a must-read for superannuation fund trustees and their auditors, who should act on ASIC\u2019s recommendations by ensuring that fair value disclosures and expense information are clear and meaningful for fund members and that robust audit evidence is provided for investment valuations,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"SMSF auditors should pay careful attention to ASIC\u2019s surveillance report into the financial reporting and audit of registrable…\n","protected":false},"author":2,"featured_media":58082,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,174,175],"class_list":["post-58081","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-ie","tag-ireland","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/58081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=58081"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/58081\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/58082"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=58081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=58081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=58081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}