Guide · Audit Evidence · Last Updated 4 August 2026
The Evidence SMSF Auditors Need to Sign Off a Property Value
William Spark, Founder & Director
2025 SMSF Adviser Awards, Newcomer of the Year Winner · About
What Evidence Does an SMSF Auditor Accept for a Property Valuation?
Auditors need sufficient appropriate evidence of market value: recent comparable sales listed in full, an area and market context, a stated methodology, and an accountable author. A kerbside appraisal or automated estimate without itemised sales generally fails the test. A report itemising 5 to 10 comparable sales passes it.
This article covers the standard itself, where it comes from, and how each common form of evidence measures up. It is written for trustees and accountants who want the audit to be uneventful; the auditor-facing version of the same material, mapped to each audit requirement, is on our page for SMSF auditors, and the wider rules sit in the complete guide.
Where the Standard Comes From
Two documents set the bar. Regulation 8.02B of the SIS Regulations requires every fund asset to be reported at market value each year, and the fund’s auditor must verify that the value is based on objective and supportable data. Auditing standard ASA 500 then tells the auditor what verification means: they must obtain sufficient appropriate audit evidence before signing. Sufficient speaks to how much evidence; appropriate speaks to its quality, meaning relevance and reliability. A valuation is not audit-ready because someone impressive produced it. It is audit-ready when a third party can trace the concluded figure back through a stated method to evidence they can check.
The stakes for the auditor are personal. Approved SMSF auditors are accountable to ASIC and the ATO for the opinions they sign, and in March 2024 the ATO contacted approximately 16,500 SMSFs that had reported property and other hard-to-value assets at the same value for at least three income years, while reviewing more than 1,000 auditors associated with those funds. An auditor who waves through weak evidence is risking their registration, which is why they push back on valuations that assert a number without showing the workings.
The Four Questions Every Auditor Asks
Strip away the auditing language and the test of a property valuation comes down to four questions. Is the evidence recent enough to reflect the current market? Is it relevant, meaning genuinely comparable sales rather than loosely similar ones? Is the method stated, so the path from evidence to figure can be followed on the page? And is the figure traceable, with each comparable sale itemised in enough detail to verify independently? A report that answers all four rarely generates a single query. A report that fails any one of them becomes a correspondence file.
This is why our reports itemise 5 to 10 comparable sales in full, name their evidence sources, state the methodology, and carry the personal signature of the team member who prepared them. Across 3,500+ reports, not one has been rejected by an auditor, and the format is the reason. The companion piece on evidence that passes and fails walks the same ground from the trustee’s side of the desk.
How Common Evidence Measures Up
| Evidence | Audit-ready? | Why |
|---|---|---|
| Valuation report with 5 to 10 itemised comparable sales | Accepted | Recent, relevant, methodical and traceable. Answers ASA 500 before it is asked. |
| Full sworn valuation with inspection | Accepted | Accepted. Usually more than annual reporting requires, at ten times the cost. |
| Agent appraisal with 3+ comparable sales attached | Accepted | Acceptable when the sales relied on are itemised, not merely asserted. |
| Trustee valuation with documented comparable sales | Accepted | Permitted, but scrutinised closely. The documentation carries the whole weight. |
| Kerbside agent letter without sales details | Not sufficient alone | The ATO's own example of evidence that is generally not sufficient on its own. |
| Automated online estimate | Not sufficient alone | No itemised sales, no stated method, no accountable author to query. |
| Council rates notice on its own | Not sufficient alone | A mass-appraisal rating figure. Supporting context at best, never the evidence. |
The dividing line runs straight through the middle of that table: everything accepted lists its sales, everything rejected does not. The regulator has said as much in its own words.
The ATO, on agent appraisals
“Stating what the property is likely to sell for based on sales in the area, without listing details of those sales, would generally not on its own be sufficient appropriate evidence.”
Australian Taxation Office, Verifying the market value of fund assets
Every SPV report lists 5 to 10 comparable sales in full.
What Happens When Evidence Falls Short
An auditor who cannot obtain sufficient appropriate evidence for a material property value has limited options, and none of them are good for the fund. They may qualify their opinion, and they may be obliged to lodge an auditor contravention report with the ATO under regulation 8.02B. Two features of that outcome surprise trustees. First, the contravention value can be reported as the entire carrying value of the property, not the margin in dispute, because it is the reported value as a whole that lacks support. Second, the report lands the fund on the ATO’s radar at exactly the moment its record-keeping looks weakest. Administrative penalties can follow for trustees, and the audit itself grows longer and more expensive while queries go back and forth.
All of that is avoidable for the price of doing the evidence properly the first time. It is also why we put money behind the outcome: under our Compliance Guarantee, if an auditor ever queries one of our reports we fix it free, refund the fee if it still is not accepted, and pay that fund’s audit preparation fee for that financial year.
Making the Audit Uneventful
The cheapest audit is the one with nothing to argue about. If your fund holds property, order the evidence before the auditor asks: a report with itemised comparable sales, dated to the 30 June just passed, delivered in 1-4 business days. Residential is $299 + GST and commercial is $425 + GST, Australia-wide, with no inspection and no payment required up front. Accountants running multiple funds can put the whole client book on one consolidated invoice.
Frequently Asked Questions
What standard do SMSF auditors apply to a valuation?
Sufficient appropriate audit evidence under auditing standard ASA 500, applied to the market value requirement in regulation 8.02B. In practice: is the evidence recent, relevant to this property, methodical, and traceable from the sales to the figure.
How many comparable sales does an auditor want to see?
The ATO's trustee guidance expects a valuation to list the comparable sales it relied on, and cites at least three for agent appraisals and trustee valuations. Our reports itemise 5 to 10, which answers the question before it is asked.
Can an auditor accept last year's valuation?
Only where it remains supported by current, objective and supportable data. If the market has moved, or the property has changed, year-old evidence is difficult to rely on, and the ATO's trigger is whether the value has changed significantly or become materially inaccurate.
What happens if the evidence is not good enough?
The auditor may be obliged to lodge an auditor contravention report with the ATO, and the contravention can be reported against the entire carrying value of the property, not just the disputed margin. Trustees can face administrative penalties.
Does a more expensive valuation mean better audit evidence?
Not by itself. Auditors verify evidence, not price tags. A sworn valuation is accepted but usually exceeds what annual reporting requires, while a desktop report with itemised comparable sales and a stated methodology meets the same test at a fraction of the cost.
Evidence Your Auditor Can Sign Off
5 to 10 comparable sales itemised in full, methodology stated, personally signed. 3,500+ reports and not one rejected.
Last updated 4 August 2026. General information about audit evidence, not financial advice. Auditors with questions about our report format are welcome to contact us directly.
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