The Australian Securities and Investments Commission (ASIC) has increased its focus on the lodgement of financial reports, following a review of 1,166 ‘grandfathered’ large proprietary companies, after more than half failed to lodge financial reports over FY23 or FY24. Certain large proprietary companies that were established prior to 1995 and had their financial statements audited were previously exempt from the financial reporting framework in the Corporations Act 2001 (Cth), though these grandfathering arrangements came to an end following the enactment of the Treasury Law Amendment (2022 Measures No. 1) Act 2022 on 10 August 2022.
In response, ASIC has foreshadowed taking regulation action to ensure companies to lodge their financial reports moving forward. ASIC has also indicated that it will launch a broader surveillance focused on non-lodgement of financial reports by large proprietary companies, to be completed by Q1 2026.
Key takeaway: Companies relying on historical exemptions should not assume they are exempt from current financial reporting obligations.