The Reporting and audit update covers regulatory developments in reporting and audit, including sustainability and financial reporting matters.
This Reporting and audit update contains the following articles:
- Early observations issued on sustainability reporting to assist entities
- ASIC and AASB launch sustainability reporting webinar series
- ASIC releases focus areas for financial reporting, audit and sustainability reporting for 2026-27
- Seven companies receive infringement notices for allegedly failing to lodge financial reports on time
- Surveillance review prompts revised accounting judgements for two entities
- ASIC streamlines sustainability reporting for related schemes
- FAQs updated on auditing and assurance requirements for sustainability reports
- ASIC reissues Regulatory Guide 43 Financial reporting and audit relief
- Three sunsetting financial reporting relief instruments remade
- ASIC updates sustainability reporting and audit relief decisions register
- Lodgement of financial and sustainability reports contained in annual report
Early observations issued on sustainability reporting to assist entities
ASIC has published its observations on the initial sustainability reports prepared under Chapter 2M of the Corporations Act 2001 to assist entities ahead of the 30 June 2026 reporting season. The review considered whether the reports provide high-quality information useful for decision-making that complies with the Corporations Act and AASB S2 Climate-related Disclosures.
The review found a marked improvement in both the quantity and quality of climate-related financial information, particularly compared with earlier voluntary disclosures. The introduction of standardised requirements also appeared to promote consistency and improve clarity of information. We also saw information being presented well through tables and diagrams.
Our review also identified opportunities for entities to enhance their sustainability reporting. We encourage entities to consider the following when preparing reports:
- do not include disclaimers that conflict with the statutory framework and objectives of Chapter 2M, as these can mislead or confuse
- use all reasonable and supportable information – covering past events, current conditions, and forecast future conditions – when identifying climate-related risks
- disclose relevant judgments, assumptions, and measurement uncertainties clearly and effectively, ensuring they are presented close to related information
- avoid obscuring material climate-related financial information with additional disclosures
- when cross-referencing information outside the sustainability report, entities must ensure they meet the relevant requirements
- remember that ‘climate-related targets’ under AASB S2 include legally required targets, such as those set by the Safeguard Mechanism for greenhouse gas emissions.
For more information on our review of the 31 December 2025 sustainability reports, see our media release, ASIC issues early observations on sustainability reporting ahead of 30 June 2026. Our final observations will be published in the second half of 2026.
ASIC and AASB launch sustainability reporting webinar series
ASIC, in partnership with the Australian Accounting Standards Board (AASB), is rolling out a series of online webinars to help entities strengthen their understanding of the fundamental concepts behind Australia’s new sustainability reporting requirements.
The three webinars are designed as introductory and foundational content and are well suited to smaller and mid-size companies who are planning for or are in the capacity building stage of their climate-related financial disclosures.
Each session features presentations from the University of Technology Sydney (UTS) covering a range of sustainability reporting topics, followed by a Q&A with ASIC, AASB and UTS experts. Three introductory webinars are available covering climate science and physical risks (16 June), transition risks and opportunities (25 June), and emissions accounting, scenario analysis, governance and risk management (30 June), see below for details.
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Webinar |
Date and time |
Registration link |
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Introductory capability building 1 – climate science and physical risks |
Tuesday 16 June, 12pm to 1pm AEST |
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Introductory capability building 2 – transition risks and opportunities |
Thursday 25 June, 12pm to 1pm AEST |
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Introductory capability building 3 – emissions accounting, scenario analysis, governance and risk management |
Tuesday 30 June, 12pm to 1pm AEST |
In addition to the webinars, ASIC and AASB released eight interactive e-learning modules in May 2026, exploring the foundational concepts behind sustainability reporting. To further support the sector, they also hosted a series of free in-person workshops in Sydney, Melbourne, Brisbane and Perth throughout May 2026. These workshops offered expert-led presentations, lively discussions and practical activities, and gave participants the chance to network and share insights with peers navigating similar stages in their reporting journey.
For more information, read our media release, ASIC and AASB launch sustainability reporting webinar series. Please also visit our sustainability reporting webpage for the educational modules and details about the sustainability reporting requirements.
ASIC releases focus areas for financial reporting, audit and sustainability reporting for 2026-27
On 18 May 2026 ASIC published its focus areas for financial reporting, audit and sustainability reporting for 2026-27. For details, see our media release, 26-098MR ASIC sets financial reporting, audit and sustainability focus areas for FY 2026-27.
An overview of ASIC’s key priorities for financial reporting, audit, and sustainability reporting activities in 2026-27 are set out as follows:
Financial reporting
ASIC will continue to monitor areas where significant judgement is required from preparers of financial reports. ASIC will review financial reports of listed and unlisted companies, registrable superannuation entities (RSEs) and managed investment schemes (MISs). We will also review the disclosures of companies that have provisions for decommissioning and site-restoration costs.
Audit
ASIC will review 25 audit files during 2026-27. While maintaining its focus on listed and unlisted companies and RSEs, our review will also include a selection of MISs. Audit files will be selected based on concerns of material misstatements within financial reports, other internal or external data that indicates a risk to audit quality, and from a random selection process.
Compliance
In addition to continuing our focus on non-lodgement of financial reports by large proprietary companies, ASIC will review registered company auditors’ compliance with their obligations to lodge their annual statements.
Sustainability reporting and assurance
ASIC will continue to focus on sustainability reports submitted by Group 1 entities, and we will engage with large audit firms about their assurance engagement methodology.
For more information, see our media release, 26-098MR ASIC sets financial reporting, audit and sustainability focus areas for FY 2026–27.
Seven companies receive infringement notices for allegedly failing to lodge financial reports on time
ASIC has issued, and received payment for, 21 infringement notices worth more than $4 million for alleged FY24 financial reporting breaches.
Recent enforcement actions are listed below.
Canva Group pays $792,000 in infringement notices for failing to lodge financial reports on time
- ASIC has issued infringement notices totalling $792,000 to four companies within the Australian Canva Group for allegedly failing to lodge their financial reports for the financial year ending 31 December 2024 by the required date. See media release: 26-090MR Canva Group pays $792,000 in infringement notices for failing to lodge financial reports on time (6 May 2026).
- Canva Pty Ltd, Canva Operations Pty Limited, Canva Trading Pty Ltd, and Fusion Books Pty Ltd each paid an infringement notice of $198,000 for allegedly not lodging their financial reports by the 30 April 2025 due date. Canva Pty Ltd lodged its FY24 consolidated report covering the four companies on 27 March 2026.
Mecca companies pay $594,000 in infringement notices for failing to lodge financial reports on time
- Three large proprietary companies associated with the Mecca group have paid $594,000 in infringement notices issued by ASIC after allegedly failing to lodge audited financial reports on time for its financial year ending 28 December 2024. See media release: 26-057MR Mecca companies pay $594,000 in infringement notices for failing to lodge financial reports on time (31 March 2026).
- Mecca Brands Pty Ltd, Mecca Brands NZ Pty Ltd and RTCH Pty Ltd each paid an infringement notice of $198,000 for allegedly not lodging their financial reports by the 28 April 2025 due date.
These actions are in addition to court-imposed fines for failing to lodge financial reports and related governance obligations, including more than $1.1 million in fines against three public companies in a single day. See media release: 26-058MR Three public companies fined more than a million dollars for breaching financial reporting and company officer obligations (1 April 2026).
ASIC Commissioner Kate O’Rourke said, ‘ASIC is undertaking targeted, data-driven surveillance to identify non‑lodgement and persistent late lodgement of financial reports.
‘Companies and other entities with reporting obligations must ensure financial reports are lodged within the required timeframes. Both non-lodgement and late lodgement prevents creditors and other users of the reports from making timely and informed decisions when dealing with these companies and is a failure of their legal obligations.'
ASIC remains focused on driving improved compliance by companies and other entities with financial reporting obligations through an ongoing surveillance program and enforcement action. Financial reporting misconduct, including failure to lodge financial reports, is one of ASIC’s 2026 enforcement priorities (see our 13 November 2025 media release: 25-273MR ASIC announces 2026 enforcement priorities).
Surveillance review prompts revised accounting judgements for two entities
Viva Energy Group Limited (Viva Energy) and Pure Foods Tasmania Limited (Pure Foods Tasmania) revised their financial reports following a review conducted under ASIC’s financial reporting surveillance program.
Viva Energy reassesses accounting approach after ASIC review, resulting in $25 million impairment
ASIC’s review of Viva Energy Group Limited (Viva Energy) financial report for the year ended 31 December 2024 raised concerns about its approach to impairment testing of its convenience retail sites. The approach involved assessing some sites as a group (as part of the Shell Card cash-generating unit (CGU) on the basis that Shell Card is a wholesale offering across Viva Energy’s Australia-wide network, rather than assessing them all on an individual site basis.
Accounting Standard AASB 136 Impairment of assets (AASB 136) requires an entity to test assets for impairment at an individual asset level where possible. Impairment should only be assessed at CGU level if the recoverable amount of an individual asset cannot be determined.
Because Viva Energy was able to assess impairment for each individual retail site included in the Shell Card CGU, ASIC took the view that the group approach was not appropriate.
Viva Energy recognised a total impairment expense for its retail convenience sites for the year ended 31 December 2025 of $558.8 million. Of the total impairment expense, $25 million (4.5%) is attributable to the change in approach to assessing all retail convenience sites at the individual asset level in accordance with ASIC’s view. For more information, see our media release: 26-075MR Viva Energy reassesses accounting approach after ASIC review, resulting in $25 million impairment.
Pure Foods Tasmania reduces $4.5 million in deferred tax assets following ASIC review
ASIC reviewed Pure Foods Tasmania’s financial report for the financial year ended 30 June 2025 and raised concerns about the recognition of an unused tax loss as a deferred tax asset that did not meet the requirements of Accounting Standard AASB 112 Income Taxes (AASB 112).
Under AASB 112, an unused tax loss can only be recognised as a deferred tax asset if it is probable that future taxable profit will be available against which the unused tax losses can be utilised.
Following ASIC’s review, Pure Foods Tasmania reversed its recognition of $4.5 million of deferred tax assets, accounting for 31% of its total assets, and disclosed the reversal in its half-yearly report for the financial year ending 30 June 2026. For more information, see our media release: 26-082MR Pure Foods Tasmania reduces $4.5 million in deferred tax assets following ASIC review.
ASIC streamlines sustainability reporting for related schemes
ASIC has provided sustainability reporting relief to related schemes following targeted stakeholder consultation.
The ASIC Corporations (Amendment) Instrument 2026/313 (ASIC Instrument 2026/313) amends ASIC Corporations (Related Schemes Reports) Instrument 2025/438 (ASIC Instrument 2025/438). The amendment allows a registered scheme, subject to certain requirements, to include the sustainability disclosures of its related schemes within a single sustainability report.
Previously, related registered schemes relying on ASIC Instrument 2025/438 could present their financial reports and directors’ reports together in a single combined report. However, the sustainability reporting requirements in the Corporations Act did not expressly permit sustainability reports to be combined in the same way. ASIC Instrument 2026/313 amends ASIC Instrument 2025/438 by extending the existing relief so that related registered schemes could include their sustainability reports and directors’ reports in a single sustainability report.
The relief is only available where are a number of requirements are met, including:
- the related schemes are already relying on the financial reporting relief in ASIC Instrument 2025/438
- the presentation of the sustainability reports is based on the same groupings for the presentation of the financial report to the extent that those registered schemes are also required to prepare a sustainability report
- the sustainability reports are audited or reviewed by the same auditor a prominent statement that the relief is being relied upon and where the required sustainability disclosures for each scheme can be found.
The relief does not reduce the substantive sustainability reporting requirements under the Corporations Act and AASB S2 Climate-related disclosures. Reporting entities must still ensure that climate-related financial information for each scheme is clearly identified and not obscured by aggregation with dissimilar information.
These amendments are intended to reduce regulatory burden by:
- reducing unnecessary duplication where the same information applies to multiple related schemes, and
- help users better understand the connections between the sustainability reports and annual financial reports of each registered scheme that relies on the relief.
For more information, download ASIC Instrument 2026/313.
FAQs updated on auditing and assurance requirements for sustainability report
In response to questions from industry, ASIC has updated its Sustainability reporting FAQs to:
- provide more detailed guidance about how the auditor appointment, resignation and removal requirements apply where an entity is required to prepare a sustainability report
- reflect the recent legislative changes extending the modified liability settings to ‘relief condition reports’ and ‘voluntary sustainability reports’ prepared under the Corporations Act, following the passage of Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2005
- provide more detailed guidance about how the auditor rotation requirements apply to reviews and audits of sustainability reports, and
- provide an additional example about how the auditor reporting obligations apply where the lead auditor for an entity’s sustainability report is not the same as the lead auditor for the entity’s annual financial report.
Auditors and preparers of sustainability reports should also refer to the AUASB website’s Sustainability Assurance FAQs for further guidance on the practical considerations relating to the review and audit of sustainability reports.
ASIC reissues Regulatory Guide 43 Financial reporting and audit relief
On 24 April 2026 ASIC reissued Regulatory Guide 43 Financial reporting and audit relief (RG 43) to streamline guidance and reflect changes to legislation. RG 43 provides guidance to entities seeking relief from the financial reporting and audit requirements of the Corporations Act.
The changes:
- reflect legislative reforms since the guidance was last updated
- incorporate other relevant ASIC guidance, including Regulatory Guide 29 Financial reporting by Australian entities in dual listed company arrangements (RG 29), and
- simplify the existing guidance.
As part of these changes, RG 29 has been withdrawn.
For further information, download Regulatory Guide 43 Financial reporting and audit relief (RG 43).
Three sunsetting financial reporting relief instruments remade
In March 2026, ASIC made the following legislative instruments that replace instruments due to sunset on 1 April 2026 after consultation with industry:
- ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2026/183
- ASIC Corporations (Electronic Lodgment of Financial and Sustainability Reports) Instrument 2026/59, and
- ASIC Corporations (Disregarding Technical Relief) Instrument 2026/180.
ASIC Instrument 2026/183 allows entities to round amounts in financial reports and directors’ reports to the nearest thousand dollars.
ASIC Instrument 2026/59 allows entities listed on the securities exchanges operated by ASX Limited, Cboe Australia, National Stock Exchange of Australia Limited and Sydney Stock Exchange Limited to lodge financial, sustainability and directors’ reports electronically with the market operator without having to lodge the reports with ASIC.
ASIC Instrument 2026/180 allows entities to prepare a disclosure document or product disclosure statement for ‘continuously quoted securities’ under sections 713 and 1013FA of the Corporations Act 2001 and to lodge ‘cleansing notices’ under sections 708A and 1012DA of that Act.
ASIC also repealed ASIC Corporations (Offer Information Statements) Instrument 2016/76, which was due to sunset on 1 April 2026, and withdrew Regulatory Guide 28 Relief from dual lodgement of financial reports (RG 28).
For more information, see ASIC updates financial reporting relief instruments.
ASIC updates sustainability reporting and audit relief decisions register
Since our last newsletter, ASIC has continued to consider applications for relief from the sustainability reporting requirements. We have updated the sustainability reporting and audit relief decisions register to reflect these decisions. Recent decisions include relief granted to subsidiaries of a dual listed company structure, a subsidiary of a listed Canadian parent, and an entity that is part of a stapled group listed on ASX. When assessing whether compliance with the sustainability reporting requirements would impose unreasonable burden, some of the factors we have considered include:
- the underlying policy objectives of the sustainability reporting requirements in Ch 2M
- how users of the sustainability report will be impacted if relief is granted, including whether users will receive alternative disclosures that is substantially aligned with the Australia sustainability reporting requirements; and
- whether the compliance burden is the result of the entity’s own structuring or reporting choices.
We are generally unlikely to grant relief merely because:
- a reporting entity is privately owned, closely held by only a small number of members, or has limited known external users, or
- users of the climate-related financial information already have access to it.
We recommend that prospective applicants consult the sustainability reporting and audit relief decisions register before lodging a relief application, as it offers valuable guidance on the considerations that influence ASIC’s decision-making and outlines any potential conditions we may attach to relief.
For guidance on the relief application process, refer to Information Sheet 82 Apply for relief (INFO 82), Regulatory Guide 51 Applications for relief (RG 51), as well as Regulatory Guide 280 Sustainability reporting (RG 280).
Lodgement of financial and sustainability reports contained in annual report
Entities that are required to prepare a sustainability report under the Corporations Act may choose to prepare an annual report to meet their annual reporting obligations under Chapter 2M of the Act. For these entities, the annual report generally includes the financial report, the directors’ report, the sustainability report and the auditor’s reports on the financial report and sustainability report.
Entities lodging their reports with ASIC through the company officeholder, registered agent and auditor portals are required to complete Form 388 Copy of financial statements and reports and Form 398 Copy of sustainability report and auditor’s report and must include the annual report as an attachment to both forms.
Alternatively, listed entities relying on ASIC Corporations (Electronic Lodgment of Financial and Sustainability Reports) Instrument 2016/181 may electronically lodge the annual report as a single lodgement with the relevant market operator (i.e. ASX, Cboe Australia, NSX or SSX).
Entities may also choose to prepare and lodge a standalone sustainability report that is not included in a broader annual report. If lodging with ASIC, the sustainability report should be lodged using Form 398 and the annual financial report should be lodged using Form 388.
For more information about lodging sustainability reports, see How and when to lodge your sustainability report? and our User guides for lodging sustainability reports.
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