The Australian Securities and Investments Commission (ASIC) has urged companies and auditors to lift reporting standards, warning that basic compliance requirements are still not being met.
The findings appear in Report 842, ASIC’s oversight of financial reporting and audit 2025–26 (REP 842).
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During 2025–26, the regulator reviewed 353 financial reports across 311 companies and 42 registrable superannuation entities (RSEs).
Findings on superannuation funds were published separately in Report 841.
ASIC also conducted financial reporting surveillance on 30 companies and widened its audit programme to 25 files across 12 firms, covering 19 companies and six RSEs up from 15 files in 2024–25.
Regulatory intervention led ten companies to improve material business risk disclosures in their operating and financial reviews.
Entities also amended or agreed to adjust asset valuations, deferred tax assets, employee benefit provisions, and general disclosures.
ASIC issued 15 comment forms containing 42 findings to auditors across 11 firms.
Deficiencies included failing to challenge management assumptions, lacking sufficient evidence, and failing to document compliance with ethical, independence, and quality management requirements.
ASIC Commissioner Kate O’Rourke said: “Our surveillance found that some report preparers and auditors did not challenge significant judgements, including for revenue recognition, impairment and asset valuations.
“Getting these areas right is essential to providing investors with information they can rely on. Auditors need to be independent, obtain stronger evidence, challenge management assumptions and document their conclusions.”
Auditors submitted remediation proposals, which ASIC will monitor in 2026–27.
The regulator also directed six firms including BDO, Deloitte, EY, Grant Thornton, KPMG, PwC to run self-assessments and create action plans addressing firm-specific findings and Report 817 independence obligations.
Financial reporting and auditor misconduct remain key enforcement priorities for ASIC in 2026.
Since 1 July 2025, ASIC has initiated Federal Court proceedings against three auditors and two audit firms over alleged serious failures.
Disciplinary board applications led to two auditor registration cancellations and one suspension, while three auditors cancelled registrations voluntarily.
Companies received over A$9m ($6.3m) in infringement notices for late or missing reports, alongside court penalties surpassing A$1.6m.
