The ATO’s 2026 SMSF annual return (SAR) changes are a “good thing” for the SMSF sector, Naz Randeria, director of Reliance Auditing Services, said.
She said that although they may look minor, the changes are in fact targeted and practical, and will help build confidence in the sector through regulatory oversight and audit quality.
Randeria said the auditor fee labels – H1 and H2 in Section C of the SAR – are now mandatory and the ATO has also clarified that all modified opinions in the independent auditor’s report must be reported, including qualified opinions, adverse opinions and disclaimers.
“I welcome these changes. It is difficult not to read them as part of the ATO’s broader focus on SMSF audit quality, especially where low-cost, high-volume online audit models have placed pressure on the market,” she said.
“A quality SMSF audit is not a data-entry exercise. It requires evidence, scepticism, judgement and documentation. That takes time. Time has a cost.”
Randeria gave an example of how this works using two funds, A and B. Fund A holds cash, listed shares and managed funds. The records are complete, valuations are clear and there are no compliance issues. The audit is clean.
Fund B owns a commercial property leased to a related party. The lease is outdated, rent has not been reviewed, valuation evidence is weak and trustee minutes are missing. The auditor follows up, considers the compliance implications, documents the file and issues a qualified opinion or disclaimer.
“These two audits should not look the same. They do not carry the same risk, require the same judgement or involve the same level of work. In many cases, that difference should be reflected in the audit fee reported at H1 or H2,” she said.
“That is why mandatory audit fee reporting matters. A low fee does not automatically mean a poor audit. But where a fund has valuation issues, related-party concerns, missing records or a modified opinion, an unusually low fee should raise a fair audit quality question.”
Randeria continued that the modified opinion change reinforces the point.
“If the independent auditor’s report is qualified, adverse or disclaimed, the SAR should not suggest the fund had a clean audit,” she said.
“For auditors, this is a reminder that quality must be visible in the file and defensible in the fee. For tax agents and administrators, it means the audit report must be read before the SAR is lodged. For trustees, it reinforces that the audit is not a cheap annual formality.”
She said the changes don’t create a new audit obligation but make key audit information more transparent.
“That is a positive step for audit quality, regulatory oversight and confidence in the SMSF sector,” she said.
Bulk Audit Fees has not changed in the last 10 years – $330