Awan Hammad

    Hi John


    Thanks. It would be great to get other members views on this issue.

    My view is to raise a Part A financial qualification if you are unable to verify the value of the unlisted companies. The qualification could state:

    “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 unlisted companies which are valued at $XXXX in the Statement of Financial Position. Due to the nature of these Companies asset’s, I cannot verify the market value of these investments. Hence, I provide no opinion on

    the market value of these assets as at 30 June 2022.”

    In relation to Part B of the audit report my view is that if you qualify in relation to SIS Reg 8.02B re a breach of “an asset must be valued at its market value” then you would be required to lodge an ACR (Auditor Contravention Report).

    In relation to valuing assets the ATO does note that:

    Why assets need to be valued | Australian Taxation Office (ato.gov.au)

    “Investments without a ready market

    When making investment decisions on behalf of the fund, you have certain duties and responsibilities which are designed to protect and increase a member’s benefits for retirement. It is expected that you would be aware of the value of an asset at the time of acquisition, its potential for capital growth and its capacity to produce income.

    It’s unlikely that an asset with no known value or potential for capital or income growth would be considered a prudent investment to support members’ retirement goals.”





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