26-243MR ASIC review highlights need for stronger scrutiny of super fund valuations

For compliance teams, this signals heightened regulatory focus on valuation governance and audit quality. Super funds and their auditors must enhance valuation processes, ensuring robust methodologies, independent verification, and comprehensive documentation. The review underscores the need for stronger board oversight and challenge of valuations, particularly for illiquid assets.

Auditors are expected to apply greater professional scepticism and improve audit procedures. While no immediate penalties are announced, ASIC's findings often precede targeted supervisory action. Firms should proactively review their valuation frameworks, assess third-party valuation providers, and strengthen internal controls.

Investment in RegTech for valuation and audit could mitigate risks. The competitive landscape may favour funds with transparent and defensible valuation practices, as members and regulators demand greater accountability. Compliance teams should prioritise updating policies, training staff, and engaging auditors to address ASIC's concerns.

Given the systemic importance of super funds, this review also has implications for financial stability and consumer protection. Overall, the message is clear: valuation scrutiny must improve, or firms risk regulatory intervention and reputational damage.