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Stephen Chiang

Feb 22, 2023

Audit evidence - rental property

in SMSF Technical Forum

For audit work paper purposes, when a real estate agent manages a rental property and issues annual rental statement listing the gross rent and outgoings, does the auditor still need to have copies of the outgoings on file?

Trustee argues that the outgoings are paid for by an independent party and the annual rental statement should be sufficient evidence.

Your comments please.

1 answer0 replies

Comments (1)

THE AUDITORS INSTITUTE

Feb 23, 2023

Hi Stephen

My view is that a rental statement from an agent is sufficient audit evidence to support the rental income and the property expenses (the outgoings).

What I would do in addition is to:

1) Sight the rental agreement.

2) Request copies of invoices for any material property expenses.

3) Request copies of insurance invoices.

Seeing property expense invoices (again subject to materiality) would be important if they are repairs or capital improvements to ensure that they are correctly accounted for.

Seeing insurance expense invoices is important to ensure the property is insured in the name of the Fund.

If any other members have a view please let the forum know.

Thanks

SMSF AAA