Auditors to report overdue financial statements to ASIC
Auditors to report overdue financial statements to ASIC
Auditors of the financial report must notify the Australian Securities and Investments Commission (ASIC) if they become aware of circumstances that give them reasonable grounds to suspect that there has been a contravention of the Corporations Act 2001 (see section 311). This applies to significant contraventions, as well as those that are not significant, which the auditor believes have not been, or will not be, adequately dealt with by commenting on it in the auditor’s report, or by bringing it to the attention of the directors.
New revised ASIC guidance has identified that non-lodgement of financial statements by any entity required to lodge with ASIC is a significant contravention. Entities should be aware of these recent changes regarding the auditor’s responsibility to report entities that fail to lodge their financial statements on time.
What did the old guidance say?
Under the superseded guidance, only non-lodgement for listed or disclosing entities was automatically significant and therefore required reporting to ASIC.
New guidance applies to all entities
ASIC’s updated guidance, contained in Regulatory Guide 34 Auditor obligations: Reporting to ASIC, identifies non-lodgement of financial reports for all entities as an example of a significant contravention, requiring reporting to ASIC.
When should auditors report?
For listed and disclosing entities, auditors should report to ASIC if the entity fails to lodge its financial report by the due date.
For all other entities, auditors should notify ASIC if the financial report has not been lodged within 28 days of the due date.
What companies should expect?
Listed entities are automatically suspended from trading on the ASX until a financial report is lodged, and auditors will continue to report this promptly to ASIC. The same applies to other unlisted disclosing entities.
For other entities such as private companies, registered schemes and unlisted public companies, your auditor will be required to report to ASIC if your financial statements have not been filed with ASIC within 28 days of the reporting deadline.
When are the lodgement deadlines?
Lodgement deadlines are as follows:
|
Type of entity |
Lodgement deadline |
|
Listed entity |
Within three months of the end of the annual reporting period |
|
Unlisted disclosing entity |
|
|
Registered scheme |
|
|
Registrable superannuation entity |
|
|
Unlisted public company (including a company limited by guarantee that is not registered with the Australian Charities and Not-for-profits Commission) |
Within four months of the end of the annual reporting period |
|
Large proprietary company |
|
|
Small foreign-controlled proprietary company not included in consolidated financial statements lodged with ASIC |
|
|
Small proprietary company with one or more CSF (crowd-sourced funding) shareholders at any time during the year |
So, for example, for private companies and unlisted public companies with:
- Years ending prior to 30 June 2025, the deadline for lodgement has already passed. There will be a late fee, and the auditor will have to inform ASIC immediately, or by 28 October 2025, for 31 May 2025 year ends (i.e. this is after the release of the revised ASIC guidance identifying non-lodgement as a significant breach).
- 30 June 2025 year-ends, these entities must lodge by 31 October 2025. If they fail to do so, there is a late fee, but the auditor will also have to inform ASIC if lodgement is more than 28 days overdue (i.e. if the entity has not lodged by 28 November 2025).
Reminder about late fees and penalties
We remind entities that the fee for submitting your financial statements late is, per set of financial statements:
- $98 if up to one month late
- $411 if over one month late.
In addition, ASIC has recently taken action against various private companies for failing to lodge financial statements, with one group incurring penalties of as much as $187,800.
While the fees for late lodgement may, in the scheme of things, not be significant for some, entities should be aware that Schedule 3 to the Corporations Act 2001 sets out the number of penalty units for breaching the section 319(1) lodgement requirements as 120. With each penalty unit valued at $330, this makes the maximum penalty for failing to lodge one set of financial statements $39,600.
Need help?
Our IFRS & Corporate Reporting team can provide assistance to unlisted public and private companies needing help with financial statement preparation. Please contact us now.