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Jason G

Apr 17, 2024

Crypto Cold Storage - Audit Report & ACR

in SMSF Technical Forum

I am auditing a fund in which 85% of its value is tied to Crypto held offline in cold storage.

In my view, I should issue a disclaimer of opinion because there is no real way of verifying the existence and value of those investments and the issue is material and pervasive.

My question is, should I qualify Part B of the audit report for R.8.02B (Market Valuation)? My view is that if existence cannot be verified, then we don't really know what is being valued. I cannot confirm market valuation requirements have been complied with.

Given I have not identified a breach of market valuation requirements but rather lack sufficient evidence, is it appropriate to qualify Part B without lodging an ACR regarding valuation?

Thank you.

3 comments

Comments (3)

Rex Walker

May 26, 2024

If the trustee is unable to to provide sufficient and appropriate evidence that they have valued the assets at market value at year-end, and the value is likely to be material, then they have failed r8.02B to a material extent; qualify the auditor's report Part B. If the assets are likely to be a material balance, then it isn't possible to verify the reported value, and Part A of the auditor's report should be qualified.

If the likely value of the breach is 5% of gross assets, or at least $30,000, or if the fund was established up to 15 months prior to the end of the year being audited, then the ATO guideline is to lodge an ACR.