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The XYZ SMSF invested in Crypto currency using trading plat form Independent Reserve during 2021-22. The Ownership of Independent Reserve is in the name of SMSF. Later the fund has transfer the Crypto Currencies to digital wallet means not held in Independent Reserve.
The client provided me with the screenshots of holdings as on 3/9/2022 . Obviously, I am unable to confirm whether SMSF has clear ownership of the crypto assets, and the fund must maintain and be able to provide evidence of a separate crypto wallet for the SMSF from that used by trustees and members personally.
My questions are –
1. Are the above information (screenshots) are sufficient & enough audit evidence?
2. Is the statutory declaration from trustees/member is sufficient enough to clear audit without contravention?
Hi Alkesh
There are differing views in the industry re your query.
I am not sure what the screenshots exactly record so difficult to comment on these.
A statutory declaration from a trustee / member that an asset exists would not be satisfactory audit evidence for a material asset of the Fund.
Auditors often in your example are issuing at least a Part A qualification such as:
"Part A: Financial audit
Qualified Opinion
I have audited the special purpose financial report of XYZ Superannuation Fund
comprising the statement of financial position as at 30 June 2022, and the operating
statement, a summary of significant accounting policies and other explanatory notes.
In my opinion, except for the effects on the financial report of the matter referred to in
the Basis of Qualified Opinion section of my report below, the financial report
presents fairly in all material respects, in accordance with the accounting policies
described in the notes to the financial report the financial position of the fund at 30
June 2022 and the results of its operations for the year then ended.
Basis for Qualified Opinion
The Fund Trustee has invested in Cryptocurrency as at 30 June 2022. The total
carrying value of this investment is $100,000 as at 30 June 2022. As we have not
received reliable audit evidence to support the ownership of these assets we provide
no opinion on the market value of these Cryptocurrency as at 30 June 2022. "
It would be great to get other members view as to how they would approach your example.
Thanks
SMSF AAA