On May 15, AST ASIC highlighted focus areas for Jun. 30 reporting.
AST ASIC outlined an expanded program of work to enhance integrity and quality of financial reporting and auditing, achieving goal of confident and informed investors.
It also announced a new review of auditors’ compliance with ethical and independence standards to support financial reporting and audit surveillance program.
Follows AST ASIC Dec. 2023 focus areas for Dec. 31, 2023 reporting, see #195442.
Expanded Program
Program covers listed companies, public interest entities, previously grandfathered large proprietary companies; includes superannuation funds from Jun. 30, 2024.
Focus areas include asset values, provision adequacy, subsequent events, disclosures.
Financial reports from large proprietary entities are now included in the program.
Superannuation trustees must lodge audited financial reports for most superannuation funds with AST ASIC, within 3 months of end of the fund’s 2023-24 financial year.
Additionally, AST ASIC encouraged voluntary climate reporting ahead of proposed mandatory requirements to report for financial years commencing from Jan. 1, 2025.
It also reminded all listed and unlisted public companies to include a new consolidated entity disclosure statement in their financial reports; changes effective for annual reporting periods beginning on or after Jul. 1, 2023, and will apply from Jun. 30, 2024.
Auditors' compliance with auditor independence requirements will be reviewed, as well as ethical and independence requirements in the Australian Auditing Standards.
AST ASIC identified concerns re implementation of quality management requirements by audit firms, urging firms to adopt a more comprehensive and transparent approach.
Further reviews of audit quality management systems are planned for the future.
May 16, 2024 Speech
On May 16, 2024, AST ASIC Commissioner, Kate O’Rourke, gave speech at the CA ANZ audit conference 2024; overview of critical financial reporting, audit surveillance work.
Touched upon AST ASIC’s audit findings from 2022-2023 surveillance program; gave overview of focus areas for Jun. 2024 reporting period, reiterating information above.
In May 2024, AST ASIC said firm restated 2022 accounts over concerns, see #212751.
In May 2024, AST ASIC reported on audit failure, restated its priorities, see #213998.
Jul. 2024 Reminder New Obligations Commenced
On Jul. 25, 2024, AST ASIC said super trustees now required to lodge audited financial reports for funds with ASIC within 3 months of end of fund’s financial year, #154509.
This new obligation promotes greater transparency and accountability re super funds; ASIC said audited financial reports need to be lodged via ASIC’s regulatory portal.
It expects trustees to ensure financial reports are of high quality, containing useful and meaningful data to build public trust and confidence in integrity of financial system.
Fees incurred for late lodgment; for most funds, the deadline will be Sep. 30, 2024; ASIC has built new electronic transaction available in ASIC’s regulatory portal.
Namely, to accept lodgment of reports; to reduce regulatory burden for trustees and auditors, ASIC has worked with AST APRA to facilitate a single lodgment point.
With trustees now able to lodge compliance reports that are required under SPS 310 (see #198299) with ASIC at the same time as their audited financial reports.
Once lodged, audited financial reports of superannuation funds will be publicly available free of charge on ASIC’s website; trustees will be subject to increased scrutiny on the quality of their financial reports in relation to superannuation funds.
In 2024, ASIC’s financial reporting and audit surveillance program will be reviewing these financial reports for 1st time; discussed situation where significant deficiencies in disclosure or concerns re possible material misstatements identified in financial report.
In such situation, the super fund will be subjected to a financial reporting surveillance.
Auditors will also be subject to increased scrutiny on quality of audit work re super funds; trustees should ensure governance arrangements, processes, controls in place, apply appropriate experience, expertise re financial reporting, underlying processes.
