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Clare Evans

Jun 03, 2022

Audit Evidence for Assets

in SMSF Technical Forum

Hi fellow Auditors,

Just a quick question.

I am auditing a fund which has not provided sufficient audit evidence for a couple of assets.

-Term deposits - Evidence of existence was provided for an earlier date, but not June 30th (500k). It seems to rollover every year.

-Property - This definitely existed in prior years, but has been subdivided over time by another entity, and now no title search or other evidence has been provided to prove this $250k asset is still in the name of the fund.

I have qualified part A on the audit report.

But is an ACR also warranted for both issues?

Really appreciate any feedback.

Thanks, Clare

6 answers0 replies

Comments (6)

Unknown member

Jun 08, 2022

Yes I would definitely lodge a ACR

Clare Evans

Jun 08, 2022

Thanks all for the help :)

Rex Walker

Jun 08, 2022

Clare, It appears that the market valuation of the property requirement would not have been satisfied, which would involve both Part A and Part B quals.

Ian Walters

Jun 08, 2022

Good refresher . Keep up the good work

Clare Evans

Jun 08, 2022

Thank you so much for the help. I really appreciate that. Clare

THE AUDITORS INSTITUTE

Jun 05, 2022

Hi Clare

Thanks, re the term deposit I assume you can get the following rollover statement after 30 June 2021 & on that basis you should not have to issue a Part A or Part B qualification.

Re the property if you cannot confirm its existence / being owned by the Fund yes I agree you should qualify Part A of the audit report assuming it is a material asset of the Fund. In relation to Part B if the Fund records this property as an asset but is no longer the legal owner I would be considering qualifying & lodging an ACR in relation to:

Section 62 of SIS - sole purpose test.

Regulation 4.09A - separation of assets.

Based on your explanation of the property I would write to the trustees and request an explanation as to what has happened in relation to the property.

I would refer the trustees to Section 35C(2) of SIS that requires:

"The trustees must provide the auditor with the necessary documents to complete the audit in a timely and professional manner; and within 14 days of a written request from the auditor".

If you do not receive the documents requested within 14 days of the request I would also qualify the audit report in relation to this and refer to this in the ACR.

The views of other members would be appreciated.

Thanks

SMSF AAA