The Australian Securities and Investments Commission (ASIC) has outlined its focus areas for financial reports for the year ending Dec. 31.
Directors, financial report preparers, and auditors are being urged to ensure compliance, particularly in areas requiring significant judgement and estimates.
ASIC Commissioner Kate O’Rourke (pictured above) stressed the importance of improving reporting quality, highlighting areas prone to non-compliance.
“We have highlighted matters that require the most judgement and use of estimates as these areas have previously shown the highest rates of non-compliance,” O’Rourke said.
ASIC has pinpointed the following critical areas for the upcoming reporting season:
While ASIC focuses on these areas, O’Rourke reminded entities of their responsibility to produce complete, accurate, and transparent reports.
ASIC is also increasing scrutiny on financial reporting obligations, particularly for large proprietary companies that previously held grandfathered status.
“We will be contacting a number of these entities and, in certain circumstances, may take action against companies for failing to comply with their reporting obligations,” O’Rourke said.
This year will also mark the first requirement for consolidated entity disclosure statements for December year-end reporters. Additionally, ASIC will monitor the financial reports of registrable superannuation entities with December year ends.
New sustainability and climate reporting requirements will come into effect for financial years starting Jan. 1. Initially targeting the largest entities reporting under Chapter 2M of the Corporations Act, ASIC advises all impacted companies to familiarize themselves with the upcoming obligations.
ASIC, which recently released its first industry-wide report under the internal dispute resolution (IDR) data reporting framework, will continue its auditor compliance project into 2025, focusing on independence and conflicts of interest. Auditors are encouraged to self-identify and self-report any non-compliance issues.
ASIC’s surveillance program regularly reviews financial reports of publicly listed and economically significant entities to ensure accuracy and compliance.
Report 799, released in October 2024, outlined ASIC’s findings for the 2023–2024 period, identifying areas where financial reporting and audits require improvement.
Entities are urged to review ASIC’s detailed financial reporting and audit focus guidance to ensure full compliance in the year ahead.
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