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The value of a residential property is currently estimated to be under represented in the balance sheet by 25%. but the property is being sold. I am inclined to seek an amendment. The alternative is a comment in the management letter with a request for a valuation at year end if not sold in the current financial year. Any views?
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Hi Alain
If you are currently doing a SMSF audit and the valuation of an asset is materially incorrect my view is you should issue a Part A financial qualification and a Part B compliance qualification re SIS Regulation 8.02B that requires:
"When preparing accounts and statements required by subsection 35B(1) of SISA, an asset
must be valued at its market value."
You would also need to raise it in your management letter and lodge an auditors contravention report (assumind it meets the criteria).
Given your concerns the value in the financial statements may not have been prepared on a reasonable basis.
The ATO's guidelines re valuations can be found at:
Thanks
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