The Australian Securities and Investments Commission (ASIC) has outlined its key focus areas for financial reporting, audit, and sustainability reporting activities for the 2026-27 financial year, including updates to its surveillance programs.
ASIC commissioner Kate O’Rourke said reliable financial information underpins market transparency and investor decision-making.
“Our surveillance programs reinforce the importance of high-quality reporting and audit. Reliable financial information is critical to transparency in Australia’s capital markets and informed investment decisions by investors,” O’Rourke said.
ASIC said it will monitor areas requiring significant judgement from financial report preparers, including revenue recognition, asset impairment assessments, and the recognition and measurement of financial instruments.
The regulator will review financial reports from listed and unlisted companies, registrable superannuation entities, and managed investment schemes. It will also review disclosures from companies carrying provisions for decommissioning and site restoration costs, assessing them against new guidance issued by the Australian Accounting Standards Board under AASB 137 Provisions, Contingent Liabilities and Contingent Assets.
ASIC said it will review 25 audit files in 2026-27, covering listed and unlisted companies, registrable superannuation entities, and a selection of managed investment schemes.
Audit files will be drawn from three sources: cases involving material corrections or concerns about material misstatements; cases flagged by internal or external data indicating risks to audit quality, including independence threats; and files selected through a random process.
The regulator said it will also monitor and report on audit firms’ implementation of remedial actions identified through prior findings. ASIC said it is separately engaging with the six largest audit firms on firm-wide responses to Report 817, which examined auditors’ compliance with independence and conflict-of-interest obligations.
ASIC said its administration of the mandatory climate reporting framework will continue, with a focus on sustainability reports submitted by Group 1 entities and engagement with large audit firms on assurance methodologies.
The regulator noted the federal government has announced plans to consult on reforms aimed at reducing reporting burdens while retaining core sustainability reporting requirements. ASIC said it will participate in that consultation process.
ASIC said its reporting surveillance programs aim to foster high-quality, consistent, and comparable financial information to support the integrity of Australia’s capital markets.
The announcement builds on findings from ASIC’s 2024-25 surveillance program, published in Report 819 in October. The regulator reviewed 254 listed and large proprietary company financial reports and conducted surveillances on 22 companies, resulting in 18 companies making or agreeing to make changes to their financial reports.
