The regulator said its focus on auditor independence and conflicts of interest obligations will continue in early 2025.
It has urged urging directors, preparers of financial reports and auditors to be aware of the enduring and ongoing focus areas in its proactive surveillance of financial reports for the year ending 31 December 2024.
ASIC Commissioner Kate O’Rourke said the regulator highlighted matters that require the most judgement and use of estimates as these areas have previously shown the highest rates of non-compliance.
Areas of focus for the upcoming reporting season include:
· Impairment and asset values
· Provisions
· Events after year-end and before completing the financial report
· Disclosures in the financial report and Operating and Financial Review (OFR)
“While these areas are emphasised, ASIC expects all reporting entities to ensure the reports are complete, accurate and informative,” O’Rourke said.
ASIC would also target non-compliance with financial reporting obligations more broadly.
“ASIC is aware that some formerly grandfathered large proprietary companies may not be lodging financial reports, despite being required to do so since years ending 31 December 2022 or 30 June 2023,” O’Rourke continued.
“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.”
This would also be the first financial year for December year-end reporters to prepare and lodge a consolidated entity disclosure statement.
ASIC would be monitoring for compliance with this requirement and would also review the financial reports of registrable superannuation entities with December year-ends.
