On 31 October 2025, the Australian Securities and Investments Commission (ASIC) released findings from its financial reporting and audit surveillances for the 12 months to 30 June 2025 (REP 819).

Background

REP 819 is the third and final report from ASIC’s expanded program of work to improve financial report and audit quality. In preparing REP 819, ASIC reviewed 254 company financial reports, conducted 22 surveillances and reviewed 10 audit files at eight audit firms.

Findings

In REP 819 ASIC outlines:

  • Findings from company financial reporting and audit surveillances.
  • Enforcement and compliance actions against registered company auditors.
  • Outcomes relating to company financial reports.
  • Observations on auditor reporting and on voluntary sustainability reporting to assist preparers of mandatory sustainability reports.

As a result of ASIC’s work, 18 entities have made or agreed to make changes to their operating and financial review to improve their disclosures of material business risks in their next financial report.  ASIC has also issued nine comment forms to audit firms setting out its concerns. These comment forms were also shared with the company directors, together with the firms’ responses. ASIC has also taken enforcement action against registered company auditors for failing to comply with auditing standards.

Key messages

The work described in REP 819 complements ASIC’s wider financial reporting and audit work on audited financial reports of registerable superannuation entities (RSEs) and the requirements that sit at the foundation of trust put in auditors, namely their compliance with independence and conflicts of interest obligations (Report 817 Building trust: Auditors’ compliance with independence and conflict of interest obligations).

Key messages from these work streams include:

  • Financial information: Companies and other entities should ensure they have the right expertise and resources devoted to the preparation of high-quality and timely financial information.
  • Asset valuations: ASIC notes the significance of asset valuations. Not only are these a subject of possible estimation uncertainty and judgement, the capacity of investors and members to compare entities’ financial position and performance relies on how assets have been categorised and valued. ASIC is concerned to ensure auditors of RSEs and companies are vigorously testing information including asset valuations, especially when those assets are impaired or valuations are under pressure.
  • Estimation: ASIC asks preparers to pay attention to other areas where there are estimation uncertainty and judgement, such as revenue recognition and provisions and topics which may be qualitatively material for investors and members. ASIC also encourages preparers of financial reports to be open in disclosing approaches and key assumptions they have taken in preparing their financial reports, especially in newer areas, and be candid on material business risks such as in the operating and financial review.
  • Independence: ASIC reminds firms that auditor independence underpins stakeholder trust and confidence in the audit process and the reliability of the financial information being audited. A stronger observance of independence requirements by auditors will help enhance trust; it will provide a foundation for more rigorous challenge in the audit process, leading to better financial information.
  • Significant contraventions: ASIC is concerned that it identified instances of auditors not proactively raising and reporting significant contraventions to it, including potential non-compliance with their independence requirements. ASIC reminds auditors of their obligations to report contraventions. ASIC recently updated Regulatory Guide 34 Auditor obligations: Reporting to ASIC (RG 34) to help auditors better understand their obligations.

Next steps

ASIC will continue to engage with industry to improve financial reporting and audit practices in the 2025-26 financial year. Its 2025-26 surveillance program includes reviewing the 30 June 2025 financial reports of all RSEs not covered in its first RSE surveillance programme.