Developing practical valuation audit guidance through collaboration

Working with auditors, industry participants, regulators and Australian counterparts, the XRB is developing practical guidance to help auditors obtain sufficient appropriate audit evidence over the valuation of investments held through managed funds. A key feature of the project has been the breadth of engagement undertaken throughout its development. 

Investment funds in New Zealand increasingly invest through other managed funds and investment structures. As these structures become more complex, auditors can face practical challenges in obtaining sufficient appropriate audit evidence about the reported value of investments held through other funds.

The project has brought together a New Zealand Working Group comprising representatives from audit firms, discussions with the Financial Markets Authority (FMA), targeted engagement with industry representatives, and input from the New Zealand Auditing and Assurance Standards Board (NZAuASB). The XRB has also worked closely with the Australian Auditing and Assurance Standards Board (AUASB), which is progressing related work in Australia. Together, these discussions have provided valuable challenge, insight and practical feedback.

These insights are helping shape a principles-based, risk-responsive guide that reinforces the importance of professional judgement and professional scepticism when obtaining and evaluating audit evidence. 

We are working towards issuing our guidance in December, in time for the March 2027 reporting cycle.