Highlights

  • The ATO has identified market valuations, high-risk auditors, high-volume practices and auditor independence as key priorities for 2026–27.
  • Around 200 SMSF auditor reviews and audits were completed in 2025–26, with 39 matters referred to ASIC.
  • Weak evidence supporting asset ownership, existence and Market Value remains a recurring compliance concern.
  • Newly registered auditors are also expected to receive targeted attention aimed at identifying and addressing deficiencies early.

The Australian Taxation Office has set out where it will focus its attention on self-managed super fund (SMSF) auditors during 2026–27, with audit evidence and independence remaining central themes.

In guidance published in late July 2026, the ATO outlined its compliance priorities for a sector comprising more than 670,000 SMSFs holding over $1 trillion in assets. Approved SMSF auditors play an important gatekeeping role in the system, and the regulator is signalling continued scrutiny of audit quality.

What last year's reviews found

During 2025–26, the ATO completed around 200 reviews and audits of SMSF auditors and referred 39 matters to the Australian Securities and Investments Commission.

A recurring concern was that auditors had not obtained sufficient appropriate evidence to support the ownership, existence or market value of fund assets.

That finding helps explain the emphasis of the 2026–27 compliance program.

The four focus areas for 2026–27

The ATO has identified four priority areas.

The first is market valuation reviews, where the regulator will examine whether auditors obtained adequate objective evidence to support asset values and compliance with the relevant market valuation requirements.

The second is high-risk auditor reviews, targeting auditors identified through intelligence and data analysis as potentially conducting inadequate or insufficiently independent audits.

The third area is high-volume auditor reviews. These will consider whether auditors responsible for large numbers of SMSF audits have appropriate systems, processes and quality controls in place to maintain audit standards.

The fourth focus is auditor independence, particularly where an auditor or their firm provides both assurance and non-assurance services to the same SMSF.

These arrangements can create independence threats that need to be properly identified, assessed and addressed.

Newly registered auditors

The ATO also intends to focus on newly registered SMSF auditors.

The objective is to ensure newer auditors understand their professional and reporting obligations and to identify deficiencies before they become embedded in their audit practices.

Early intervention can help improve audit quality and reduce the risk of more serious compliance problems developing later.

Who may be affected

Approved SMSF auditors are the direct audience, particularly those with large audit portfolios, potential independence issues or clients holding difficult-to-value assets.

Trustees are also indirectly affected because heightened scrutiny is likely to translate into stronger requests for supporting records and valuation evidence.

Funds holding direct property, unlisted investments and other Assets without readily observable market prices may face greater demands for objective evidence.

What to consider next

Auditors should review their independence frameworks, evidence-gathering procedures and documentation standards ahead of the 2026–27 audit cycle.

Firms providing both assurance and non-assurance services should reassess whether those arrangements create independence threats and whether appropriate safeguards are available.

High-volume audit practices should also ensure their systems can support a large workload without compromising audit quality.

For trustees, the practical takeaway is to prepare complete and objective evidence supporting asset ownership, existence and market value.

A sector under the microscope

With more than 670,000 funds holding over $1 trillion in assets, SMSFs represent a substantial part of Australia's retirement system.

Approved auditors provide an independent check on whether those funds are meeting their regulatory obligations.

By publishing its compliance priorities, the ATO is effectively giving auditors advance notice of the areas most likely to attract scrutiny.

The 39 referrals to ASIC arising from around 200 reviews and audits in 2025–26 also show that weaknesses identified during compliance activity can lead to further regulatory action.

Valuations remain a major focus

Market valuations are particularly important because asset values influence member balances and a range of SMSF reporting outcomes.

Auditors should therefore be satisfied that reported values are supported by appropriate and objective evidence rather than relying solely on Trustee estimates.

This is especially important for hard-to-value assets such as direct property, private companies, unlisted investments and collectables.

Where Division 296 may affect a member, accurate valuation evidence becomes even more significant because member balance information can influence the operation of the tax rules.

However, the underlying audit obligation itself has not changed: auditors must still obtain sufficient appropriate evidence to support the values reported in the fund's accounts.

What auditors should prioritise

Auditors should prioritise three areas: independence, evidence and documentation.

Independence safeguards deserve particular attention where the audit firm provides other services to the fund.

Evidence files should clearly support asset ownership, existence and market value.

High-volume practices should make sure their procedures remain effective as workloads increase, while newly registered auditors should familiarise themselves with reporting and professional obligations from the outset.

For trustees, the flow-on message is straightforward: stronger audit scrutiny means stronger documentation will be expected.