Link Administration Holdings Limited (Link Group) has announced the restatement of its half year and full year 2023 financial reports after a review initiated as part of ASIC’s new financial reporting and audit surveillance program identified concerns in March 2023.
ASIC raised concerns that Link Group’s financial reports contained material misstatements in the carrying value of Funds Solutions (FS) business assets, provisions and expenses in relation to settlement with the UK Financial Conduct Authority (the FCA). As a result, Link Group has decided to amend its accounting treatments that relate to the financial impact of settlement with the FCA and impairment of the FS business.
Link Group has advised the restatement will result in a $50 million increase in its half year statutory loss and a $169 million decrease in its full year statutory loss in 2023. Link Group also noted its 2024 forecast for statutory profit and loss is reduced by $169 million due to the amendments. The correction will be disclosed in Link Group’s combined financial reports for the half-year ending 31 December 2023 and financial year ending 30 June 2024.
ASIC reminds preparers of financial reports that consideration should be given to adequacy of provisions for liabilities and valuation of assets.
ASIC recently emphasised the importance of making adequate provisions in financial reports and highlighted a number of areas for attention (refer 23-149MR).
Background
ASIC’s financial reporting and audit surveillance program aims to improve the quality of financial reporting and to ensure financial reports have been prepared in accordance with the law, supporting investor confidence and the integrity of Australia’s capital markets.
ASIC has adopted a new integrated approach to conducting financial reporting and audit surveillances, which focuses on the entire financial reporting chain. In addition to auditors, it makes other stakeholders (like financial report preparers and audit committees) more accountable for the quality of the financial report and audit.
ASIC conducts regular reviews on a risk-basis of the financial reports of selected listed companies and other significant public interest entities to monitor compliance with the Corporations Act 2001 and Australian Accounting Standards. ASIC alerts the market prior to each reporting season about current topics or issues that will be the focus of the reviews.