Over the past few years ASIC has increasingly ramped up its enforcement efforts, following recommendations outlined in the 2019 final report of the Financial Services Royal Commission, and ASIC has continued to improve its systems for identifying non-compliance.
This is notable most recently with ASIC increasing prosecutions of companies that fail to lodge financial reports.
Obligation to prepare & lodge financial reports with ASIC
Under Chapter 2M of the Corporations Act 2001 (Cth) (‘the Act’), disclosing entities or registered managed investment schemes are required to complete and lodge financial reports with ASIC within three months after the end of the financial year. All other companies must lodge their financial reports within four months after the end of the financial year (Section 319). The reports must also generally comply with the Australian Accounting Standards (Section 296).
Failure to do so is a contravention of the Act, and company Directors (and Secretaries) may be liable for non-lodgement.
ASIC Enforcement & Compliance Projects
ASIC has recently been particularly committed to enforcement of non-compliance as seen in various media releases.
The first half of 2023 was quite busy for ASIC, with an increased focus on enforcement that resulted in the prosecution of 36 companies and penalties of over $700,000 issued for failure to lodge financial reports, hold annual general meetings (AGMs), and maintain the required number of directors and resident directors.
ASIC also publicly named these companies, listing their individual failings and fines.
Have you lodged your accounts yet?
As ASIC continues to improve its systems for identifying non-compliance, companies (and all reporting entities for that matter) are now more likely than ever to be scrutinised, prosecuted and penalised for non-lodgement of financial reports.
Given the media releases naming non-compliant companies, the risk to reputational damage has never been more present.
Do you need assistance in lodging your financial reports with ASIC or understanding your obligations?
Have you considered whether your company may be eligible for audit or lodgement relief? This is particularly relevant for small proprietary limited companies with foreign ownership.
CorpSec Services works closely with companies to provide assistance and guidance to meet their financial reporting obligations in accordance with the Act, lodge financial reports with ASIC and apply for audit relief, when applicable.
Contact us at team@corpsecservices.com.au for further information.
