Key Highlights

  • An approved SMSF auditor must audit the final year before the closing return is lodged.
  • The ATO's 2026–27 auditor focus includes market valuation reviews.
  • Trustees should assemble an evidence pack as soon as the wind-up is minuted.

An approved SMSF auditor must sign off a fund's final year before the closing return is lodged. It is one of the few steps in a wind-up that trustees cannot do themselves, and it depends on evidence only trustees can supply. Leaving it late is a recipe for delay, and this year the ATO has made clear that auditors are under scrutiny too.

What the ATO expects of a wind-up audit

The ATO's guidance for auditors of winding-up funds, last updated in April 2025, lists what they should check. They confirm that any wind-up requirements in the trust deed have been met and that all members agreed to the wind-up in writing. They look at whether the financial statements correctly show assets, liabilities, income, expenses and the final allocations and payments to members, and whether any income or expenses are overdue at the wind-up date (apart from estimated tax awaiting the final assessment).

Asset disposals are a particular focus. The auditor confirms they were made at market value, supported by verifiable evidence from trustees. Where collectables were sold to a related party, including as an in-specie payment of super, the ATO says the auditor should confirm there is a written valuation from a qualified independent valuer.

Benefit payments get the same scrutiny. Auditors confirm that benefits were paid only to members who met a condition of release and gave written confirmation, to eligible beneficiaries, or to a legal personal representative. Where a member had not met a condition of release, the auditor checks the benefit was transferred to, and received by, a complying fund.

The bank account and the audit report

If the fund's bank account stays open, the ATO says the auditor should get written representations from trustees that later transactions will comply with super law. The ATO gives an example of how a report may be qualified: where the bank account remains open, the auditor cannot verify compliance of transactions after the audit date.

If the fund has contravened reportable provisions, the auditor must lodge an auditor/actuary contravention report and notify trustees in writing. Even where there is no problem, the ATO says it is good practice for the auditor to issue a final management letter reminding trustees to lodge the final return, keep the bank account open for any final tax payment or refund until the ATO confirms the wind-up, and keep records, including wind-up records, for at least 10 years after lodging the final return.

Why 2026–27 adds pressure

On 29 July 2026 the ATO published its auditor compliance focus for 2026–27. It reports more than 670,000 SMSFs holding over $1 trillion, and says it completed close to 200 reviews and audits of SMSF auditors in 2025–26 and referred 39 auditors to ASIC. Recurring problems included audit evidence, reporting and file documentation, with many auditors not obtaining sufficient appropriate evidence of the ownership, existence or market value of fund assets.

The 2026–27 focus areas include market valuation reviews (especially for assets that may trigger a Division 296 liability for a member), high-risk and high-volume auditors, auditor independence and newly registered auditors. For trustees, the message is practical: an auditor who is being asked to prove valuations will want clear, documented evidence, and may take longer to be satisfied.

Practical steps for trustees

Engage the auditor as soon as the wind-up decision is minuted. The ATO says new funds should appoint auditors at least 45 days before their due date; a closing fund should allow at least as much time and ideally more, given the extra checks.

Assemble the evidence pack early: the signed wind-up agreement, minutes, valuations for each asset, sale contracts or transfer documents, bank statements, member payment instructions, conditions of release confirmations, rollover receipts, and the trust deed.

Make sure any related-party transfers are fully documented. Where a collectable passes to a member, a qualified independent valuation is the item auditors are told to look for.

Expect auditor fees to be reported separately on the return. The 2026 return makes the deductible and non-deductible auditor fee labels mandatory, and all modified opinions must be reported.

Do not close the bank account before the audit and the wind-up confirmation are complete.

A hypothetical illustration

Suppose a fund's trustees plan to transfer a painting to a member in specie. If they leave the valuation until after the audit begins, the auditor may have to qualify the report or wait for the document. This scenario is hypothetical and used only to show the sequencing risk.

Takeaway

The final audit is a gate, not a formality. Trustees who book the auditor early, supply well-organised evidence and hold the bank account open until the ATO confirms closure give themselves the best chance of a smooth finish. With the ATO scrutinising audit quality, thorough documentation is more valuable than ever.