ASIC has today released findings from its financial reporting and audit surveillances for the 12 months to 30 June 2025.
Report 819 ASIC's oversight of financial reporting and audit 2024-25 (REP 819) outlines:
- findings from company financial reporting and audit surveillances
- enforcement and compliance actions against registered company auditors
- outcomes relating to company financial reports, and
- observations on auditor reporting and on voluntary sustainability reporting to assist preparers of mandatory sustainability reports.
ASIC Commissioner Kate O'Rourke said: 'Accurate, accessible and reliable financial information is essential for business and markets to work well. All participants in our economy rely on those preparing financial information to do so carefully and fairly, and those auditing that information to do so with skill, professionalism and independence.'
Reliable financial information remains more important than ever, particularly as entities with unlisted assets, such as superannuation funds and private credit funds, play a bigger role in the economy. There is also a growing focus placed on newer types of information, such as disclosures on climate and sustainability, in economic decision-making.
ASIC reviewed 254 company financial reports, conducted 22 surveillances and reviewed 10 audit files at eight audit firms.
As a result of the review:
- 18 entities made or agreed to make changes relating to 19 areas of concern in their financial reports including:
- Bell Group Holdings Pty Limited making a restatement to consolidate a controlled subsidiary which was previously incorrectly accounted for as an associate, and
- Energy World Corporation Limited impairing its assets by a total of US$793.8 million.
- we had audit and other findings in nine audit surveillances at eight audit firms and notified both the auditor and company of those findings in order to drive improved practices.
ASIC's enforcement action against registered company auditors included:
- Companies Auditors Disciplinary Board (CADB) proceedings resulting in the suspension of registered company auditor Joseph John Santangelo for 18 months for failing to comply with auditing standards (24-277MR)
- a court enforceable undertaking accepted by ASIC against Perth-based registered company auditor, David Makowa of DM Advisory Services, in relation to the surrender of registration and never to be reapplied (25-112MR)
- imposition of conditions on the registration of company auditor Allan Facey of MNSA Pty Ltd requiring additional CPD and an independent auditor review and report to ASIC (25-091MR), and
- interventions to require 32 previously grandfathered companies who failed to lodge audited financial reports with ASIC to lodge their financial report. Thirty have since lodged their reports (25-169MR).
REP 819 is the third and final report from ASIC's expanded program of work to improve financial report and audit quality. The report follows Report 816 Accounting for your super: ASIC's review into the financial reporting and audit of super funds (REP 816) and Report 817 Building trust: Auditor compliance with independence and conflict of interest obligations (REP 817).
'ASIC's expanded program of work revealed that improvement is needed in delivering higher-quality financial reports and audits, and for auditors to be more proactive in ensuring their independence and in reporting significant contraventions to ASIC,' said Ms O'Rourke.
ASIC will continue to engage with industry and evolve our program of work to improve financial reporting and audit practices. In the 2025-26 surveillance program ASIC will:
- increase the number of audit files reviewed to 25 and enhance the way audit files are selected for review by including a mix of risk-based and random file selections
- review sustainability reports for the year ended 31 December 2025 and share ASIC's observations with the market to assist preparers, and
- continue to use our full range of regulatory tools to enhance audit quality and take enforcement or compliance action where appropriate.
