Australia’s corporate regulator says its latest surveillance found persistent weaknesses in financial reporting and audit work, particularly where conclusions depend on significant professional judgment.
The Australian Securities and Investments Commission reviewed 353 financial reports covering 311 companies and 42 registrable superannuation entities during 2025–26. It conducted targeted financial-reporting surveillance of 30 companies and examined 25 audit files across 12 firms.
ASIC said some preparers and auditors did not adequately challenge judgments concerning revenue recognition, impairment and asset valuations. Ten companies changed or agreed to improve disclosure of material business risks. Other responses covered asset recognition and valuation, deferred-tax assets, employee-benefit provisions and financial-report disclosures.
The regulator sent 15 comment forms to auditors at 11 firms, recording 42 findings. The concerns included insufficient challenge of management assumptions, inadequate evidence and poor documentation of ethical, independence and quality-management requirements. ASIC said it will monitor the proposed remediation during 2026–27.
The report is supervisory, not a finding that every reviewed entity breached the law. ASIC separately noted enforcement taken since July 2025, including court cases against auditors, disciplinary applications and more than $9 million in infringement notices for failures to lodge financial reports.
ASIC released Report 842 on 29 October 2026. The regulator’s official summary links the report and identifies the firms included in the review.
