ob体育 today has published its financial reporting and audit focus areas for the 2025-26 financial year and highlighted the progress of its ongoing financial reporting and audit surveillance programs.
鈥楾hese surveillance programs aim to enhance the integrity and quality of financial reporting and auditing in Australia. We expect all entities to provide reports and audits that are accurate, complete and informative,鈥� said ob体育 Commissioner Kate O鈥橰ourke.
Financial reporting focus areas
In keeping with ob体育鈥檚 enduring financial reporting focus areas, we will continue to focus on areas where significant judgement from preparers of financial reports is required.
These include:
- revenue recognition
- asset valuation, and
- estimation of provisions.
Financial report preparers should take extra care when making such judgements especially considering recent capital market volatility.
Audit focus areas
For 2025-26, ob体育 will review an increased number of audit files. As part of our integrated approach, we will continue to select audit files where a change has been made to financial information or the financial report, or where we have concerns that a financial report may have a risk of material misstatement. In some instances, we select audit files based on other internal or externally available data.
In 2025-26, we will also review a random selection of audit files from our regulated population.
Registerable superannuation entities (RSE) surveillance
RSEs were required to lodge audited financial reports with ob体育 for the first time in 2024. We are finalising our review of around half of all lodged RSE financial reports and five RSE audits files. For our 2025-26 program, we will review the other half of the RSE financial reports as well as a selection of RSE audit files.
Our focus areas for RSE financial reports include:
- the measurement and disclosure of investment portfolios, and
- disclosure of marketing and advertising expenses.
Financial reports from grandfathered entities surveillance
In 2022, the financial report lodgement exemption for grandfathered entities was lifted. ob体育 now monitors compliance of these financial reports with the legislative requirements and applicable accounting standards.
Some of these companies have not lodged financial reports since the exemption was removed. Where we find non-lodgement of financial reports, we will follow up with the company and, if necessary, take appropriate regulatory action.
鈥楳any of these previously grandfathered entities are large companies and should be lodging financial reports. If the auditor is aware that a company is not complying with its lodgement obligations, they should inform ob体育 through the appropriate channels,鈥� Ms O鈥橰ourke said.
Sustainability reporting standards
Sustainability reporting in accordance with AASB S2 Climate-related disclosures will be mandatory for Group 1 entities with financial years commencing on or after 1 January 2025 who:
- are required to prepare an annual financial report under Chapter 2M of the Corporations Act,
- meet certain sustainability reporting thresholds, and
- have not obtained sustainability reporting relief from ob体育.
Impacted entities should begin work as soon as possible if they have not already implemented plans and procedures to meet the mandatory reporting requirements.
We will review 31 December 2025 sustainability reports as part of our 2025-26 program and will share our observations with the market to assist preparers. We will take a proportionate and pragmatic approach to supervision and enforcement as the sustainability requirements are being phased in.
Preparers of sustainability disclosures should refer to Regulatory Guide 280 Sustainability reporting (RG 280) for more information.
Auditor conflicts of interest surveillance
ob体育 is progressing its proactive, large scale surveillance focused on auditor鈥檚 compliance with their independence and conflicts of interest obligations under the Corporations Act 2001.
We encourage auditors to self-identify and self-report non-compliance with their independence and conflicts of interest obligations through our .
鈥楤ased on our data model, we considered potential independence issues in relation to over 100 audit engagements before targeting nearly 50 auditors for a more detailed review. We intend to publish the outcomes of this surveillance later this year,鈥� Ms O鈥橰ourke said.
Update to Information Sheet 284
ob体育 has updated Information Sheet 284 Public companies to include a consolidated entity disclosure statement in their annual financial report (INFO 284). The update reflects recent legislative amendments that clarify the tax residency disclosure requirements where entities are resident in more than one jurisdiction, as well as when an entity is an 鈥楢ustralian resident鈥� for the purposes of the consolidated entity disclosure statement, including partnerships and trusts.
The update is relevant to all public companies and applies to annual financial reports for financial years commencing on or after 1 July 2024.
Background
ob体育鈥檚 financial reporting and audit surveillance programs review financial reports and audit engagements from our regulated entities, including:
- publicly listed companies
- other economically significant public interest entities e.g. large proprietary companies
- grandfathered entities, and
- registered superannuation funds.
The objectives of our surveillance programs are provided on our audit inspection and surveillance programs webpage.
Our enduring focus areas relevant to the 2025-26 financial year are provided on our financial reporting and audit focus areas webpage.
In October 2024, ob体育 released Report 799 ob体育鈥檚 oversight of financial reporting and audit 2023-2024 (REP 799). This report summarises findings from our surveillance programs and other complementary work for the period 1 July 2023 to 30 June 2024. It highlights areas where the quality of financial reporting and audits can be improved.
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