ASIC recently issued Media Release 13-160 outlining their intended areas of focus for the upcoming surveillance of 30 June 2013 financial statements. This surveillance will encapsulate large proprietary companies and listed entities lodging annual reports and half year financial reports.
To assist in the preparation and audit of financial reports this reporting season, this Financial Reporting Alert provides readers with an overview of the accounting areas that ASIC will be targeting together with some additional suggestions on how to improve the quality of financial statements and reduce regulatory risk. Accounting areas to be scrutinized include compliance with Section 299A (the operating and financial review section of the directors' report), the extent to which standards AASB 10 and AASB 11 have impacted the accounts or how their future impacts are being communicated to users, and the ability of assets to sustain stated carrying values in an environment where certain industries are finding business conditions extremely difficult.
The bottom line is however, as stated by ASIC Commissioner John Price: 'Preparers of financial reports should ensure that those reports provide useful and meaningful information to the users of that information.' In this regard, we would suggest that entities avoid a minimalistic approach to disclosures and ensure that all material and significant aspects of the business and its financial statements are fully explained and discussed.
To view a copy of our alert, please click here to download the PDF file.
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