ASIC has outlined key focus areas for its financial reporting, audit and sustainability reporting activities in the 2026-27 financial year, including updates to its surveillance programs.
'Our surveillance programs reinforce the importance of high-quality reporting and audit. Reliable financial information is critical to transparency in Australia's capital markets and informed investment decisions by investors,' said ASIC Commissioner Kate O'Rourke.
Financial reporting focus areas
In keeping with ASIC's enduring financial reporting focus areas, we will monitor areas where significant judgement from preparers of financial reports is required. This includes revenue recognition, assessment of asset impairment, recognition and measurement of financial instruments.
For 2026-27, ASIC will review the financial reports of listed and unlisted companies, registrable superannuation entities (RSEs) and managed investment schemes (MISs).
ASIC will also review the disclosures of companies that have provisions for decommissioning and site-restoration costs. This will include assessing disclosures against new guidance issued by the AASB (illustrative example D of AASB 137 Provisions, Contingent Liabilities and Contingent Assets).
Audit focus areas
For 2026-27, ASIC will review 25 audit files. While ASIC will maintain its focus on listed and unlisted companies and RSEs, it will also include a selection of MISs.
Like in 2025-26, ASIC will select audit files from a mix of sources:
- where there has been a material correction to a financial report or where ASIC is concerned that a financial report may be materially misstated,
- based on other internal or external data (including independence threats), which indicates a risk to audit quality, or
- from a random selection process.
In responding to ASIC's audit findings, audit firms indicate the remedial actions they intend to take. In 2026-27, we will monitor and report on firms' implementation of those actions.
Separately, ASIC is engaging with the six largest firms to understand the firm-wide actions taken in response to Report 817 Building trust: Auditors' compliance with independence and conflict of interest obligations.
Compliance activities
ASIC will continue to focus on non-lodgement of financial reports by large proprietary companies.
ASIC will also review compliance by registered company auditors with their obligations to lodge their annual statements. These obligations are fundamental requirements that support audit quality and auditor competence.
Sustainability reporting and assurance focus areas
ASIC has taken a range of steps to support entities' compliance with the sustainability reporting framework, including guidance, relief and new educational materials. These are on our sustainability reporting webpage.
ASIC has updated its FAQs relating to the review and audit of sustainability reports in response to changes in the law and to address stakeholder questions, and have also provided sustainability reporting relief to related schemes. We are continuing to update our register of relief decisions to include ASIC's decisions on individual sustainability reporting relief applications. ASIC will also shortly share preliminary observations on lodged sustainability reports. These observations will assist 30 June reporters as they prepare to lodge their sustainability report for the first time.
The Government has announced in the Budget that it proposes to commence consultation on reforms to reduce reporting burden while maintaining core sustainability reporting requirements, and ASIC will participate in that consultation process. Ahead of any reforms, ASIC's administration of the mandatory climate reporting framework will continue, with a focus on the sustainability reports being submitted by Group 1 entities, and engagement with large audit firms on assurance methodologies as appropriate.
Background
ASIC's reporting surveillance programs aim to foster high-quality, consistent and comparable financial information to help investors make informed decisions, ultimately supporting the integrity of Australia's capital markets.
The objectives of these surveillance programs are outlined on ASIC's audit inspection and surveillance programs webpage. Financial reporting misconduct, including non-lodgement of financial reports, and auditor misconduct are enforcement priorities for ASIC.
ASIC's enduring focus areas relevant to the 2026-27 financial year are outlined on the sustainability reporting, financial reporting and audit focus areas webpage.
In 2025, ASIC released:
- Report 816 ASIC's review into the financial reporting and audit of superfunds (REP 816)
- Report 817 Building trust: Auditors' compliance with independence and conflict of interest obligations (REP 817)
- Report 819 ASIC's oversight of financial reporting and audit 2024-2025 (REP 819).
These reports summarise findings from ASIC's surveillance programs and other complementary work for the period 1 July 2024 to 30 June 2025. They highlights areas where the quality of financial reporting and audits can be improved.
