Kate O’Rourke
ASIC’s second review into the financial reporting and audit of superannuation funds has found further improvement is needed in how some super funds and auditors assess and scrutinise the value of unlisted investments.
In Report 841 Accounting for your super: Super fund financial reporting and audit 2025–26 (REP 841), ASIC’s review of 42 registrable superannuation entity (RSE) financial reports and six audits found persistent concerns around valuations.
Superannuation is central to the long-term financial security of Australians and is a major part of the national economy. Total superannuation assets have more than doubled in the past decade to nearly $4.8 trillion in funds under management.
‘Millions of Australians entrust superannuation trustees with their retirement savings. It’s imperative those investments are valued accurately, and auditors provide effective scrutiny to detect any unreliable investment valuations,’ said ASIC Commissioner Kate O’Rourke.
‘Getting valuations right matters. Accurate investment valuations are particularly important as they directly affect members’ account balances, reported investment returns, fees charged and therefore retirement outcomes.
‘Trustees cannot outsource responsibility for ensuring investment valuations are accurate and reliable, even where external fund managers are involved.’
RSE financial reports
ASIC’s review of financial reports found:
- trustees often relied on external fund managers to provide fair value information for externally managed unlisted investments, which may limit their ability to review and challenge significant valuation assumptions and estimates
- some trustees did not adjust member liabilities in a timely manner following significant investment write-downs, and
- fair value hierarchy disclosures continue to only provide high-level descriptions and references to external pricing sources, with limited information about the valuation techniques, inputs and judgements used. This makes it difficult for members to understand how some fair values were determined and the uncertainty involved.
If trustees do not have enough information to scrutinise how an investment has been valued, there is a greater risk that the value reported may not accurately reflect the underlying assets.
Trustees should have strong oversight and controls so they can challenge valuations provided by external fund managers and ensure members’ superannuation balances are measured accurately. This is particularly important for private market assets and unlisted investments which can be difficult to value and may rely on significant judgements, assumptions and estimates.
Audits of RSE financial reports
ASIC’s review of audits found:
- for externally managed investments, some auditors did not adequately test the reliability of prices provided by external fund managers, or test the methods, assumptions and data used for the valuations, and
- for internally managed investments, some auditors did not obtain sufficient appropriate audit evidence for the valuations.
Without effective scrutiny by auditors, unreliable investment valuations may go undetected, affecting the accuracy of members’ balances and reported investment returns.
Auditors need stronger audit evidence for the valuations of unlisted investments. They must rigorously test and challenge valuation assumptions and assess the reliability of prices provided by external fund managers.
Future surveillance of RSEs
In 2026–27, ASIC will continue the RSE financial reporting and audit surveillance program and expand to include managed investment schemes (schemes). We will:
- review the financial reports of 20 RSEs and 20 schemes
- undertake four RSE audit surveillances and four scheme audit surveillances, and
- consider regulatory action, including issuing audit deficiency reports, and enforcement action where we see a significant breach of the Corporations Act 2001.
‘We will continue working with industry to improve the reporting and auditing of unlisted investments so members can have greater confidence that their superannuation balances are based on reliable valuations,’ Ms O’Rourke said.
‘Trustees and auditors must address these ongoing concerns. Where they fail to do so, we will consider regulatory action.’
Downloads
Report 841 Accounting for your super: Super fund financial reporting and audit 2025–26 (REP 841)
Background
ASIC’s review of RSE financial reports in 2025-26 represented the remainder of the population of the RSEs that we did not review last financial year.
In 2025, we published Report 816 Accounting for your super: ASIC’s review into the financial reporting and audit of super funds (REP 816), which outlined our findings and called on superannuation trustees and auditors to strengthen financial reporting and audit practices.
REP 841 builds on that work by reporting the findings from our 2025-26 surveillance activities and assessing industry progress in addressing the issues previously identified.
Audit firms included in ASIC’s review
- BDO
- Deloitte
- Ernst & Young (EY)
- KPMG
- PricewaterhouseCoopers (PwC)