Hello Lina
Thanks for the question.
Thanks also to Christopher for his valuable contribution.
If you are of the view (which appears to be reasonable give the representation of the facts) that there is insufficient evidence in relation to the valuation of the asset, which is assumed to be a material balance, then there is a need to qualify Part A of the audit opinion.
It is taken at face value that the legal framework of the overseas country is such that the legal title of the asset is not capable of reflecting that it is held on behalf of the trustee of the SMSF.
Christopher points out potential audit concerns should the tenant of the real estate be a related party. It is noted that this is not referred to the in question.
At a practical level, I would be looking at:
- the contract that gave rise to the acquisition of the asset;
- cash movements in the bank account of the SMSF at the time the asset was acquired;
- cash movements in the bank account of the SMSF reflecting the receipt of rental income;
- the declaration of trust (referred to in the question).
Best regards
The Auditors Institute