Highlights

  • The ATO is urging SMSF auditors to assess independence and evidence requirements before audit work begins.
  • Asset ownership, existence and market valuation remain key compliance focus areas for 2026–27.
  • Trustees may face modified audit opinions or contravention reporting if sufficient evidence cannot be obtained.
  • Early preparation and complete documentation can reduce the risk of delays, qualifications and further ATO scrutiny.

The Australian Taxation Office has urged self-managed super fund auditors to get their audits off to a strong start, warning that independence, evidence and reporting problems are easier to resolve when identified early rather than at the final stages of an engagement.

In updated guidance released in September 2026, the regulator outlined practical steps auditors should take before forming an opinion. While the guidance is directed primarily at approved SMSF auditors, it also has clear implications for trustees who depend on a clean and timely audit each year.

What the ATO is saying

The ATO wants auditors to assess and document their independence for each engagement before audit work begins.

Auditors should also plan early for the evidence required to support the ownership, existence and Market Value of every fund asset.

The guidance also stresses the importance of documenting the work performed and the basis for conclusions reached, while considering how any identified issues could affect the audit opinion or reporting obligations.

Crucially, inadequate evidence should be followed up promptly.

That gives both auditors and trustees enough time to resolve gaps before the audit is finalised rather than leaving important issues until deadlines are approaching.

The ATO also points auditors toward its SMSF auditor checklist and broader SMSF audit guidance as practical support tools.

Who may be affected

Approved SMSF auditors are the primary audience, but trustees are directly affected because they are responsible for providing complete records and reliable valuation evidence.

If an auditor cannot obtain sufficient appropriate evidence, the consequences can extend beyond a delayed audit.

The auditor may need to modify the audit report or lodge an auditor contravention report.

That can result in additional attention from the ATO and potentially expose compliance weaknesses that might otherwise have been resolved earlier.

Trustees therefore have a direct interest in ensuring records are complete and accessible before the audit begins.

Why it matters this year

The guidance sits within the ATO's 2026–27 compliance program, which is targeting higher-risk areas including evidence supporting asset ownership, asset existence, market valuation and auditor independence.

Market valuations have also become more significant because they can affect calculations associated with Division 296 tax arrangements applying from 1 July 2026.

That places even greater importance on valuation evidence being reasonable, current and properly documented.

Auditors are expected to challenge weak or unsupported valuations rather than accepting them at face value.

What to consider next

Trustees can improve the audit process by preparing organised records, obtaining objective valuation evidence and allowing enough time for the auditor to raise and resolve questions.

Auditors should establish their independence assessment, evidence plan and documentation approach at the beginning of each engagement.

Leaving these issues until the closing stages of an audit increases the risk of missing information, modified opinions and reporting problems.

The overarching theme is preparation.

An audit that begins with clear independence documentation and a considered evidence strategy is less likely to end in a last-minute scramble.

The cost of getting it wrong

The ATO's emphasis on early preparation reflects the issues it has already identified.

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

A recurring issue was insufficient evidence supporting ownership, existence or market value of fund assets.

Starting an audit without a clear evidence plan is one of the ways those gaps can develop.

Auditor independence remains another recurring concern.

Where an auditor or their firm provides both assurance and non-assurance services to the same SMSF, the ATO expects any independence threat to be identified, assessed, managed and documented before the audit proceeds.

An unresolved self-review threat can undermine the integrity of the engagement even when the underlying financial records are otherwise sound.

Practical steps for a smooth engagement

In practice, a strong audit start means requesting key records early.

These may include bank statements, title searches, Investment holding statements and supporting documentation for asset valuations.

A realistic timetable should also leave enough room to follow up missing information before reporting deadlines.

Trustees who respond quickly to information requests can reduce the risk of delays and qualified opinions.

For auditors, building the file contemporaneously is equally important.

Documenting the independence assessment, evidence obtained and basis for conclusions as the audit progresses is far more defensible than attempting to reconstruct the reasoning later.