ASIC’s findings from 30 June 2017 financial reports and 31 December 2017 focus areas

30 June 2017 Findings

ASIC has announced it’s findings from its review of the 30 June 2017 financial reports of 220 listed and other public interest entities.

The largest number of findings continue to relate to impairment of non-financial assets and inappropriate accounting treatments.

ASIC issued Information Sheet 203 Impairment of non-financial assets: Materials for directors (INFO 203) in June 2015 to assist directors in considering whether the value of non-financial assets shown in a company’s financial report continues to be supportable.

Findings from the review of 30 June 2017 financial reports included:

  1. Asset values and impairment testing
  2. Revenue recognition
  3. Tax accounting
  4. Expense deferral
  5. Consolidation accounting
  6. Business combinations
  7. Estimates and accounting policy judgements

Refer to 17-437MR for further details.

31 December 2017 Focus Areas

ASIC has called on companies to focus on giving information for users of financial reports that is useful and meaningful, and to address the impact of major new accounting requirements.

Focus areas include:

  1. Impairment testing and asset values
  2. Revenue recognition
  3. Expense deferral
  4. Off-balance sheet arranagements
  5. Tax accounting
  6. Estimates and accounting policy judgements
  7. Impact of new revenue, financial instrument, lease and insurance standards

Refer to 17-423MR for further details.

ASIC Focus Areas for 30 June 2017

ASIC has announced its focus areas for 30 June 2017 financial reports of listed entities and other entities of public interest.

These include:

  1. Impairment testing and asset values;
  2. Revenue recognition;
  3. Expense deferral;
  4. Off-balance sheet arrangements;
  5. Tax accounting;
  6. Estimates and accounting policy judgements;
  7. Impact of new revenue, financial instrument, lease and insurance standards

ASIC re-emphasises the role of directors as being primarily responsible for the quality of the financial report, ensuring that management produces quality financial information. Further information can be found in ASIC Information Sheet 183 Directors and financial reporting (INFO 183) and ASIC Information Sheet 203 Impairment of non-financial assets: Materials for directors (INFO 203).

ASIC is continuing to also review the financial reports of proprietary companies and unlisted public companies, based on complaints and other intelligence, and are following up companies have not met their obligation to lodge financial reports with ASIC. .

Please refer to Media Release 17-162MR for further information on the focus areas detailed above.

ACNC Audit Requirements

The 30 June deadline is fast approaching for registered charities with a 31 December year end to lodge their 2016 Annual Information Statement.

Does your charity require an audit or review of its financial report when lodging its AIS with the ACNC?

A large charity (annual revenue of $1 million or more) must have its financial report audited and submit the financial report and auditor’s report to the ACNC.

A medium charity (annual revenue of $250,000 to $1 million) can choose to have it either reviewed or audited.

A small charity (annual revenue of less than $250,000) has no ACNC obligation for a review or audit.

Please note however, a medium or small charity may require a review or audit in accordance with its governing documents (eg Constitution), funding agreements, other legislative requirements such as the Associations Incorporation Act or Corporations Act 2001, or have received written notice from the ACNC Commissioner stating that it must provide audited reports.

Contact Boutique Audit Solutions today to organise the audit or review of your financial report.

Useful links:

Review and audit of financial reports: http://www.acnc.gov.au/ACNC/Manage/Reporting/ReviewAudit/ACNC/Report/ReviewAudit.aspx?hkey=1a656b65-e48f-430a-904e-581a26fa2980

Charity size and revenue: http://www.acnc.gov.au/ACNC/Manage/Reporting/SizeRevenue/ACNC/Report/SizeRevenue.aspx?hkey=f5df7a64-8946-4353-a477-69b3230d8b18

Launch of Boutique

After 16 years at my former firm, I am proud to announce the launch of my new business, ‘Boutique Audit Solutions Pty Ltd’.

“boutique (buːˈtiːk) noun: a small, exclusive business, offering a customised service

Boutique has been established to offer a solution for your corporate audit and assurance needs.

It is a small business providing individualised service, and you will be dealing directly with myself as the auditor. This allows my business model to provide a high quality audit at a competitive price.

I wish you all the best for a happy and successful 2017.