Key Areas of ASIC Oversight for Financial Reporting and Audit in FY 2025–26

Financial Reporting and Audit Focus Areas

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The Australian Securities and Investments Commission (ASIC) has released its focus areas for financial reporting and audit surveillance for the 2025–26 financial year, alongside an update on the progress of its ongoing regulatory programs.

Key Financial Reporting Focus Areas

ASIC will continue to focus on areas requiring significant judgement from report preparers, including:

• Revenue recognition

• Asset valuation

• Estimation of provisions

Given the continued volatility in capital markets, preparers are expected to apply extra care in these areas and ensure judgements are well-founded and adequately supported.

Audit Focus Areas

In FY 2025–26, ASIC will increase the number of audit file reviews. Audit engagements will be selected based on:

• Changes made to the financial report or financial information

• Indications of material misstatement risk

• Internal or externally available data analysis

Additionally, ASIC will conduct a random selection of audit files from its regulated population as part of a broader integrated approach.

Surveillance of Registrable Superannuation Entities

Since 2024, RSEs have been required to lodge audited financial reports with ASIC. To date, ASIC has reviewed approximately half of the lodged reports and five audit files. 

The 2025–26 program will cover the remaining RSE financial reports and a further selection of audit files, with particular attention to: 

• Measurement and disclosure of investment portfolios 

• Disclosure of marketing and advertising expenses 

  
  

Oversight of Grandfathered Entities

Since 2022, ASIC has removed the financial reporting exemption previously granted to certain entities under grandfathering provisions. These companies were historically exempt from lodging financial reports with ASIC but are now required to comply with standard reporting obligations. 

ASIC continues to monitor the compliance of these entities and has identified a number of companies that have yet to submit their annual financial reports. The regulator will follow up with non-compliant entities and take enforcement action where appropriate. 

ASIC also reminds auditors that if they become aware of a company failing to meet its financial reporting obligations, they should report to ASIC through the appropriate channels. 

Sustainability Reporting Obligations

From 1 January 2025, Group 1 entities meeting the following criteria will be required to report in accordance with AASB S2 Climate-related Disclosures: 

• Required to prepare an annual financial report under Chapter 2M of the Corporations Act 

• Met specified sustainability reporting thresholds 

• Have not received sustainability reporting relief from ASIC 

  
  

ASIC will review 31 December 2025 sustainability reports as part of the 2025–26 program and publish its findings to support market participants. A proportionate and pragmatic approach will be adopted as the new requirements are phased in. 

Preparers are encouraged to refer to Regulatory Guide 280 (RG 280): Sustainability Reporting for further guidance. 

Update to Information Sheet 284 (INFO 284)

ASIC has updated Information Sheet 284 (INFO 284) to reflect recent legislative changes. Public companies are now required to include a consolidated entity disclosure statement in their annual financial reports. The updated guidance clarifies tax residency disclosures for entities that:

• Operate across multiple jurisdictions

• Are considered “Australian residents” for reporting purposes, including partnerships and trusts

These requirements apply to financial years commencing on or after 1 July 2024.

If you need understand or implement ASIC’s latest financial reporting, audit, or sustainability disclosure requirements, please feel free to contact us. Our team is ready to provide tailored advice and practical assistance to help your business stay compliant and well-prepared.

Source: ASIC announces financial reporting and audit focus areas for FY 2025-26, ASIC website. 25-079MR ASIC announces financial reporting and audit focus areas for FY 2025-26 | ASIC