ASIC flags persistent flaws in super fund valuations and audits

A second regulatory review by the Australian Securities and Investments Commission (ASIC) found that superannuation trustees and auditors must improve how they evaluate and scrutinise unlisted investments.

The findings are detailed in Report 841 ‘Accounting for your super: Super fund financial reporting and audit 2025–26’ (REP 841).

Under the review programme, the regulator examined 42 registrable superannuation entity (RSE) financial reports and analysed six audits by major accountancy practices.

According to a statement, ASIC found “persistent concerns around valuations” during the assessments.

Central to Australians’ long-term financial security and the domestic economy, superannuation assets have doubled over the past decade to nearly $3.3tn (A$4.8tn).

However, ASIC found that trustees frequently relied on external managers for fair value metrics without sufficient means to review or challenge key assumptions.

Some trustees also failed to adjust member liabilities promptly following significant write-downs.

Furthermore, fair value hierarchy disclosures provided only generic descriptions and external pricing references without detailing valuation techniques, inputs or judgements.

This lack of transparency conceals uncertainty and increases the risk that reported values diverge from underlying holdings.

Auditors exhibited parallel shortcomings. When examining externally managed assets, auditors failed to adequately verify pricing reliability, methodology or data.

For internally managed assets, they lacked sufficient appropriate audit evidence.

In 2026–27, ASIC will expand its surveillance to managed investment schemes, reviewing 20 RSE and 20 scheme financial filings, alongside four RSE and four scheme audit inspections.

The regulator will also consider enforcement action and issue audit deficiency reports for significant breaches of the Corporations Act 2001.

ASIC commissioner Kate O’Rourke said: “Millions of Australians entrust superannuation trustees with their retirement savings.

“It is imperative those investments are valued accurately, and auditors provide effective scrutiny to detect any unreliable investment valuations.

“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.”