Overview
ASIC has announced the areas it will scrutinise in financial reports for the year ending 31 December 2024. The announcement is directed at directors, accountants and auditors involved in preparing those reports.
Three main focus areas
ASIC has identified three areas it will examine in December 2024 financial reports:
- Impairment and asset values - the accuracy of asset valuations and impairment assessments.
- Provisions - the adequacy and appropriateness of provisions recorded in financial statements.
- Post-balance-date events - events that occur after year end but before the report is finalised, and how those events are disclosed.
Large proprietary companies and lodgement obligations
ASIC has specifically targeted large proprietary companies that were previously exempt from lodging financial reports under grandfathering arrangements. These companies have been required to lodge financial reports since years ending 31 December 2022 or 30 June 2023. ASIC states that some of these companies are still not lodging, and enforcement action is possible. ASIC has indicated it will contact non-lodgers.
New requirement - consolidated entity disclosure statement
December year-end reporters are required to lodge a consolidated entity disclosure statement for the first time alongside their 2024 financial report. ASIC will be monitoring compliance with this new requirement.
Sustainability and climate reporting
Sustainability and climate reporting requirements under Chapter 2M of the Corporations Act 2001 begin for the largest entities from financial years beginning on or after 1 January 2025. ASIC states that all entities subject to those requirements should already understand how they apply to them before that start date.
Audit independence surveillance
An audit independence surveillance project will continue into early 2025. Auditors are encouraged to self-report non-compliance.
Key actions
- Directors and preparers of a December 2024 financial report are required to review impairment and asset valuations, provisions, and post-balance-date events disclosures before lodging - these are ASIC's stated focus areas.
- Companies that were previously grandfathered large proprietary companies are required to check whether lodgement of financial reports has been required since the year ending 31 December 2022 or 30 June 2023. ASIC has flagged it will contact non-lodgers and may take enforcement action.
- December year-end reporters are required to prepare and lodge a consolidated entity disclosure statement with this year's financial report.
- Entities subject to sustainability and climate reporting requirements from financial years beginning on or after 1 January 2025 are required to understand how those requirements apply before the start date.
- ASIC's full financial reporting and audit focus areas page is available at asic.gov.au.
This is a plain-English summary for information only, not legal or compliance advice. Always check the official source or consult a qualified professional.