Kate O’Rourke

ASIC has called for improvements in financial reporting and audit quality after its latest surveillance found preparers of financial reports and auditors are still not getting the fundamentals right.

ASIC Commissioner Kate O’Rourke said preparers of financial reports and auditors need to lift their performance, particularly when financial reports depend heavily on judgement.

‘Our surveillance found that some report preparers and auditors did not challenge significant judgements, including for revenue recognition, impairment and asset valuations.

‘Getting these areas right is essential to providing investors with information they can rely on. Auditors need to be independent, obtain stronger evidence, challenge management assumptions and document their conclusions,’ Ms O’Rourke said.

‘This year we have attributed audit surveillance findings to large audit firms by name. Greater transparency helps investors, directors and other stakeholders better understand where audit quality concerns arise and strengthens accountability across the profession.’

ASIC’s findings are published in Report 842 ASIC’s oversight of financial reporting and audit 2025-26 (REP 842).

In 2025-26, ASIC:

• reviewed 353 financial reports comprising 311 companies and 42 registrable superannuation entities (RSEs)
• conducted financial reporting surveillances of 30 companies, and
• expanded its audit surveillance program to 25 audit files of 19 companies and 6 RSEs across 12 audit firms, compared to 15 audit files in 2024-25.

The findings from ASIC’s surveillance of super fund financial reports and audits were published separately in Report 841 Accounting for your super: Super fund financial reporting and audit 2025–26 (REP 841).

As a result of concerns raised by ASIC, ten companies made or agreed to improve the disclosure of material business risks in their operating and financial reviews. Companies also made or agreed to make changes to asset recognition and valuations, financial report disclosures, deferred tax assets and employee benefit provisions.

ASIC issued 15 comment forms to auditors from 11 audit firms setting out 42 findings from its company audit surveillances where auditors did not challenge management assumptions, obtain sufficient evidence to support their conclusions and document their compliance with ethical, independence and quality management requirements.

The auditors proposed actions to remediate our findings and, in 2026-27, we will monitor and report on the outcomes and status of these remedial actions.

ASIC also requested the six largest audit firms (BDO, Deloitte, Ernst & Young, Grant Thornton, KPMG and PwC) undertake self-assessments and develop action plans to address their individual firm findings, and ASIC’s findings and calls to action in Report 817 Building trust: Auditors’ compliance with independence and conflict of interest obligations (REP 817).

ASIC will monitor the effectiveness of their action plans and continue to focus on embedding and strengthening these independence practices.

‘Audit firms now need to demonstrate that their action plans are producing meaningful and lasting improvements to independence practices,’ Ms O’Rourke said.

Financial reporting and auditor misconduct are key ASIC enforcement priorities in 2026, with ASIC taking stronger action where companies and auditors fail to meet their obligations.

Since 1 July 2025, ASIC has taken enforcement and compliance action including:

• commencing Federal Court proceedings against three auditors and two related authorised audit companies, alleging serious audit failures
• making Company Auditor Disciplinary Board applications resulting in the cancellation of two auditors’ registrations and the suspension of one auditor’s registration
• accepting the voluntary cancellations of three auditors’ company auditor registrations following independence concerns
• issuing over $9 million in infringement notices to companies for failing to lodge their financial reports, and
• court action resulting in convictions and penalties of more than $1.6 million against companies for breaching financial reporting and company officer obligations.

In 2026-27, ASIC will continue its financial reporting and audit surveillance of companies and RSEs and expand it to include managed investment schemes. Preparers and auditors should refer to our 2026–27 financial reporting, audit and sustainability focus areas.

Audit firms included in ASIC’s review

• BDO
• Deloitte
• Ernst & Young
• Grant Thornton
• Hall Chadwick
• HLB Mann Judd
• KPMG
• L Audit
• MGI Sydney Assurance Services
• PricewaterhouseCoopers (PwC)
• RSM Australia
• SW Audit

Downloads

• Report 842 ASIC’s oversight of financial reporting and audit 2025-26 (REP 842)

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Kate O’Rourke

ASIC’s second review into the financial reporting and audit of superannuation funds has found further improvement is needed in how some super funds and auditors assess and scrutinise the value of unlisted investments.

In Report 841 Accounting for your super: Super fund financial reporting and audit 2025–26 (REP 841), ASIC’s review of 42 registrable superannuation entity (RSE) financial reports and six audits found persistent concerns around valuations.

Superannuation is central to the long-term financial security of Australians and is a major part of the national economy. Total superannuation assets have more than doubled in the past decade to nearly $4.8 trillion in funds under management.

‘Millions of Australians entrust superannuation trustees with their retirement savings. It’s imperative those investments are valued accurately, and auditors provide effective scrutiny to detect any unreliable investment valuations,’ said ASIC Commissioner Kate O’Rourke.

‘Getting valuations right matters. Accurate investment valuations are particularly important as they directly affect members’ account balances, reported investment returns, fees charged and therefore retirement outcomes.

‘Trustees cannot outsource responsibility for ensuring investment valuations are accurate and reliable, even where external fund managers are involved.’

RSE financial reports

ASIC’s review of financial reports found:

• trustees often relied on external fund managers to provide fair value information for externally managed unlisted investments, which may limit their ability to review and challenge significant valuation assumptions and estimates
• some trustees did not adjust member liabilities in a timely manner following significant investment write-downs, and
• fair value hierarchy disclosures continue to only provide high-level descriptions and references to external pricing sources, with limited information about the valuation techniques, inputs and judgements used. This makes it difficult for members to understand how some fair values were determined and the uncertainty involved.

If trustees do not have enough information to scrutinise how an investment has been valued, there is a greater risk that the value reported may not accurately reflect the underlying assets.

Trustees should have strong oversight and controls so they can challenge valuations provided by external fund managers and ensure members’ superannuation balances are measured accurately. This is particularly important for private market assets and unlisted investments which can be difficult to value and may rely on significant judgements, assumptions and estimates.

Audits of RSE financial reports

ASIC’s review of audits found:

• for externally managed investments, some auditors did not adequately test the reliability of prices provided by external fund managers, or test the methods, assumptions and data used for the valuations, and
• for internally managed investments, some auditors did not obtain sufficient appropriate audit evidence for the valuations.

Without effective scrutiny by auditors, unreliable investment valuations may go undetected, affecting the accuracy of members’ balances and reported investment returns.

Auditors need stronger audit evidence for the valuations of unlisted investments. They must rigorously test and challenge valuation assumptions and assess the reliability of prices provided by external fund managers.

Future surveillance of RSEs

In 2026–27, ASIC will continue the RSE financial reporting and audit surveillance program and expand to include managed investment schemes (schemes). We will:

• review the financial reports of 20 RSEs and 20 schemes
• undertake four RSE audit surveillances and four scheme audit surveillances, and
• consider regulatory action, including issuing audit deficiency reports, and enforcement action where we see a significant breach of the Corporations Act 2001.

‘We will continue working with industry to improve the reporting and auditing of unlisted investments so members can have greater confidence that their superannuation balances are based on reliable valuations,’ Ms O’Rourke said.

‘Trustees and auditors must address these ongoing concerns. Where they fail to do so, we will consider regulatory action.’

Downloads

Report 841 Accounting for your super: Super fund financial reporting and audit 2025–26 (REP 841)

Background

ASIC’s review of RSE financial reports in 2025-26 represented the remainder of the population of the RSEs that we did not review last financial year.

In 2025, we published Report 816 Accounting for your super: ASIC’s review into the financial reporting and audit of super funds (REP 816), which outlined our findings and called on superannuation trustees and auditors to strengthen financial reporting and audit practices.

REP 841 builds on that work by reporting the findings from our 2025-26 surveillance activities and assessing industry progress in addressing the issues previously identified.

Audit firms included in ASIC’s review

• BDO
• Deloitte
• Ernst & Young (EY)
• KPMG
• PricewaterhouseCoopers (PwC)

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Sarah Court

ASIC has released the program for its Annual Forum 2026, which will bring together leaders from business, financial services, markets, government, and the community in Sydney on 17 and 18 November.

The Forum’s theme ‘Staying ahead of the next wave’, examines how Australia can safeguard the integrity of its financial system and maintain confidence for consumers and markets in an environment of accelerating and varied global change.

ASIC Chair Sarah Court said the forum would bring together a range of perspectives to explore how Australia’s financial system can anticipate and respond to the next wave of change.

‘Economic pressures, geopolitical uncertainty, and rapid technological innovation are reshaping our financial system and our markets.’

‘The challenge for all of us – government, business and regulators is to address these factors in a way that is front footed and forward thinking.’

‘ASIC’s Annual Forum is an important opportunity to consider how we navigate these changes together. It is also where ASIC will outline its enforcement priorities for the year ahead, helping ensure Australia’s financial system remains resilient in the face of ongoing disruption.’

Highlights of the 2026 program include:

• A keynote address from The Hon Dr Jim Chalmers MP, Treasurer of Australia
• A discussion on the state of the economy bringing together ASIC Chair Sarah Court, RBA Governor Michele Bullock, Productivity Commission Chair Danielle Wood and Coles CEO Leah Weckert
• A session examining how digital assets, retail participation, AI and the growing interconnection of Australian and global markets are changing the way markets operate, with ASIC Commissioner Simone Constant, ASX CEO Anthony Attia, UBS’s Nick Hughes and Betashares CEO Alex Vynokur
• A virtual keynote and Q&A with Martin Wolf CBE, Chief Economics Commentator at the Financial Times in London
• A discussion on how innovation is reshaping how Australians access financial products and services with ASIC Commissioner Kate O’Rourke, CEO, Revolut Bank Matt Baxby, Financial Conduct Authority Head of Innovation Colin Payne, incoming CEO, Redbelly Network Christian Westerlind Wigstrom and Co-Director of the UTS Human Technology Institute Professor Nicholas Davis
• ASIC Commissioner Alan Kirkland leading a discussion on the human face of global disruption with Professor Brendan Murphy AC, Chair, Australian Red Cross Lifeblood, Chandni Gupta, Deputy CEO, Consumer Policy Research Centre and Dr John Coyne, Director, National Security Program, ASPI
• Fireside discussions with Anthropic General Manager of Australia and New Zealand Theo Hourmouzis and Solicitor General Dr Ruth Higgins SC
• A conversation on lifting Australia’s productivity, with ASIC Chair Sarah Court, Treasury Secretary Jenny Wilkinson PSM, NAB CEO Andrew Irvine, and AFR Editor-in-Chief Cosima Marriner.
• The Rest is Politics host Alastair Campbell as the 2026 ASIC Annual Dinner speaker

The Forum will also consider private markets and private credit, trust in professional services firms, the future of financial advice, operational resilience, industry codes, board leadership in a volatile environment, coordination between Australia’s financial regulators, and will announce ASIC’s enforcement priorities for 2027.

The ASIC Annual Forum 2026 will be held on 17 and 18 November at ICC Sydney.

View the full ASIC Annual Forum 2026 program and register.

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Kate O’Rourke

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 has also shared 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.

ASIC media releases are point-in-time statements. Please note the date of issue and use the internal search function on the site to check for other media releases on the same or related matters.

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Kate O’Rourke

ASIC has updated its regulatory guidance on managing conflicts of interest for Australian financial services businesses.

The changes align our guidance with developments in law and policy and draw on ASIC’s regulatory experience and insights from its surveillance of private markets.

‘Conflicts of interest aren’t just ethical dilemmas. They pose real threats that erode trust, tarnish reputations, and cause lasting harm to consumers, investors, and the entire financial ecosystem,’ ASIC Commissioner Kate O’Rourke said.

‘Effective conflict management is more than a regulatory checkbox—it’s the cornerstone of trust in financial services.

The updated Regulatory Guide 181 AFS Licensing: Managing Conflicts of Interest (RG 181) sets out clear, principles-based guidance for Australian financial services (AFS) licensees.

It aims to help licensees fulfil their licensing obligation to have robust arrangements and tailored conflict management strategies in place.

Key updates include:

• how the law applies to conflicts of interest, including the scope of the conflicts management obligation and links to other related obligations
• the types of conflicts AFS licensees should identify and manage
• the need for robust, tailored arrangements to manage conflicts
• practical steps for effective conflict management, and
• a non-exhaustive ‘catalogue’ of related legal obligations and information.

The revised RG 181 replaces guidance issued in August 2004 and is part of ASIC’s ongoing regulatory maintenance and simplification agenda—making it easier for businesses to access regulatory information and understand their obligations.

Consultation feedback and ASIC’s response

Between 30 July and 5 September 2025, ASIC consulted publicly on proposed updates to RG 181.

ASIC received 26 submissions from industry, industry groups and other interested parties, with broad support for simplifying and updating the guidance.

Most feedback focused on technical details and specific guidance, such as the illustrative examples ASIC provided to identify different types of conflicts of interest.

ASIC updated RG 181 to address this feedback, where appropriate, and we have summarised our responses to key feedback.

You can read these responses along with the 22 non-confidential submissions to ASIC’s public consultation on the relevant consultation paper webpage.

Background

Conflicts of interest are a significant source of misconduct as well as consumer, investor and economic harm within the financial services sector.

Under section 912A(1)(aa) of the Corporations Act 2001, AFS licensees must have adequate arrangements in place to effectively manage all conflicts of interest, except those that occur wholly outside a financial services business.

The management of conflicts of interest was raised as an area requiring further clarification in a number of submissions to ASIC’s discussion paper on the evolving dynamics in public and private markets, and was a compliance issue identified in ASIC’s private credit surveillance report (REP 820). The issuance of the updated RG 181 was outlined as a deliverable in ASIC’s roadmap for the next 12-18 months, released as part of our response to the discussion paper in November (REP 823).

More information

• Regulatory Guide 181 AFS Licensing: Managing Conflicts of Interest (RG 181)
• ASIC seeks feedback on proposed updates to conflicts management guidance (25-150MR)
• Consultation paper 385 Proposed update to RG 181 Licensing: Managing conflicts of interest (CP 385)

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Kate O’Rourke

ASIC has 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.

Downloads

• Report 819 ASIC’s oversight of financial reporting and audit 2024–25 (REP 819)

Background

ASIC’s financial reporting and audit surveillance program focusses on financial reports and audits of listed entities, large proprietary companies and registrable superannuation entities. The surveillances of audit files cover firms that audit the financial reports of listed entities and other public interest entities.

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Kate O’Rourke

Multiple auditors from audit firms of all sizes were unable to effectively demonstrate compliance with independence and conflict of interest obligations, a new ASIC review has revealed.

The findings, outlined in Report 817 Building trust: Auditor compliance with independence and conflict of interest obligations (REP 817), follow ASIC action against several auditors and audit firm identified as in likely breach of their obligations through this review.

ASIC Commissioner Kate O’Rourke said that the audit sector directly contributes to the quality and integrity of financial reporting by companies and that it needs to observe independence requirements.

‘Auditor independence underpins stakeholder trust and confidence in the audit process and the reliability of the financial information being audited.  Unfortunately, our review found that many auditors failed to meet the basic independence requirements, and others failed to identify and critically evaluate potential threats to their independence.

‘It is not enough for auditors to adopt a tick-a-box approach to complying with these important obligations. They must think more critically about whether they are independent and be alive to even the perception that their independence is compromised,’ said Ms O’Rourke.

ASIC’s review found a disappointing number of likely breaches of prescriptive independence requirements. Fifteen auditors were found to be in likely breach of rotation requirements, relationship prohibitions or providing a prohibited non-audit service.

Nine auditors failed to demonstrate how they complied with mandatory rotation requirements that prevent auditors from auditing a listed client for more than five consecutive years.

Five auditors appeared to hold prohibited relationships with clients, including one auditor who was also an officeholder of their client.

None of the 15 auditors flagged by ASIC as having breached their obligations had proactively reported the potential breaches to ASIC, despite receiving a reminder from ASIC in October last year.

‘The failure of these auditors to report breaches to ASIC, including of the longstanding prescriptive independence obligations, is concerning,’ said Ms O’Rourke.

As a result of this review, ASIC accepted the cancellation of a company auditor’s registration for independence failures, issued a $78,250 infringement notice to Nexia Perth over prohibited services, and entered into three court enforceable undertakings with auditors associated with Hall Chadwick (NSW)and the firm over audit rotation failures. 

ASIC is conducting additional inquiries into potential breaches identified during this review.

‘Auditor independence is fundamental to audit quality and integrity. A strong focus on independence not only builds trust, it also fosters more rigorous challenge in the audit process thereby enhancing the preparation of high-quality financial information.

‘We expect auditors to carefully consider this report and use its findings to address gaps in their compliance,’ Ms O’Rourke said.

Background

How ASIC selected its review cohort

The 48 auditors and 19 audit firms that were the subject of ASIC’s review were selected using a risk based, data driven methodology. This involved reviewing data relating to 2,900 auditors for indicators of potential threats to independence arising from:

• the provision of non-audit services to audit clients
• long association with clients (including rotation), and
• relationships between auditors and clients or their officeholders (including explicitly prohibited relationships).

The final review cohort of 48 auditors included individual auditors as well as auditors from the following firms:

• BDO Audit Pty Ltd
• BDO Audit (WA) Pty Ltd
• Connect National Audit Pty Ltd
• Deloitte Touche Tohmatsu
• Ernst & Young
• Grant Thornton Audit Pty Ltd
• Hall Chadwick (NSW)
• Hall Chadwick WA Audit Pty Ltd
• Kelly Partners (Sydney) Audit Partnership
• KPMG Australia
• Pitcher Partners
• Nexia Perth Audit Services Pty Ltd
• PKF Melbourne Audit & Assurance Pty Ltd
• PricewaterhouseCoopers
• RSM Australia Partners
• Stantons International Audit and Consulting Pty Ltd
• Trood Pratt Audit & Assurance Services Pty Ltd
• William Buck (QLD) Pty Ltd
• William Buck Audit (WA) Pty Ltd

REP 817 is the second report from ASIC’s expanded program of work to improve financial report and audit quality. It follows Report 816 Accounting for your super: ASIC’s review into the financial reporting and audit of super funds. It highlights that ASIC is particularly concerned to ensure auditors are vigorously testing information on investments including asset valuations, especially when those assets are impaired or valuations are under pressure.

An annual report on our financial reporting and audit surveillance of companies and auditors will be published later in October.

ASIC announced this expanded program of work to support financial report and audit quality last year (24-101MR).

For 2025-26, ASIC’s financial reporting and audit program will increase the number of audit surveillances and include audit files where there are potential independence concerns.

Downloads

Report 817 Building trust: Auditor compliance with independence and conflict of interest obligations

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Kate O’Rourke

ASIC’s first report into the financial reporting and audit of super funds has revealed inconsistent approaches to disclosing investments, limited disclosure of sponsorship and advertising expenses, and insufficient audit evidence obtained in the valuation of some investments.

‘High quality audited financial reports underpin members’ confidence in the accuracy of information about the super funds that safeguard their retirement savings,’ ASIC Commissioner Kate O’Rourke said.

‘However, when trustees and auditors do not adequately perform their roles as gatekeepers, there is a potential risk of misstatement of asset values.

‘Super trustees must have appropriate governance arrangements to assist with the preparation of high-quality financial reports, while auditors must perform independent audits in accordance with the relevant auditing and assurance standards.’

Report 816 Accounting for your super: ASIC’s review into the financial reporting and audit of super funds (REP 816) reveals the findings from ASIC’s review of financial reports from 60 registrable superannuation entities (RSEs) for the year ended 30 June 2024 and five RSE audit files (refer to Background for details).

ASIC’s review focused on the valuation and disclosure of investments and the disclosure of expenses (25-079MR).

REP 816 is the first in a series of three reports examining financial reporting and audit quality in 2024-25. ASIC will publish a report on auditor independence in early October, followed by its annual financial reporting and audit public report in late October. This expanded program of work in 2025 demonstrates ASIC’s commitment to high quality financial reports and audits.

Valuation and disclosure of investments

ASIC’s review found RSEs took different approaches when categorising unlisted investments in the fair value hierarchy, often with limited disclosure about their approach.

These different approaches meant it was difficult for a report user to compare investments between RSE financial reports, or to understand how much they could rely on those valuations.

Disclosure of sponsorship and advertising expenses

ASIC’s review also found that sponsorship and advertising expenses were not separately disclosed in some financial reports because RSEs took a narrow, quantitative approach to materiality.

Audits of RSE financial reports

ASIC’s review of audit files found that auditors are not doing enough to obtain sufficient audit evidence about investment valuations in the RSE financial reports.

Given the size of RSEs, auditors adopted high levels of materiality, which can result in less audit work and variances not being investigated.

‘We found that some auditors also did not adequately challenge the valuations provided by fund managers of managed investment schemes. This could undermine member confidence in the accuracy of financial information about their super fund,’ Ms O’Rourke said.

‘We issued comment forms to four auditors setting out our findings and will continue to work with them to resolve our concerns.’

ASIC will continue to focus on RSE financial reports and audits as part of its 2025-26 surveillance program. We will consider taking regulatory action where we see a significant breach of the Corporations Act 2001 (Corporations Act).

Download

REP 816 Accounting for your super: ASIC’s review into the financial reporting and audit of super funds

Background

RSEs were required to lodge audited financial reports with ASIC for the first time for financial years that commenced on or after 1 July 2023.

ASIC conducted surveillance activities to ensure that RSE:

• financial reports were prepared in accordance with Australian Accounting Standards
• audits were conducted in accordance with Australian Auditing and Assurance Standards, and
• financial reports and audits complied with the Corporations Act.

ASIC reviewed 60 RSE financial reports for the year ended 30 June 2024. These RSEs were selected based on investment profiles, size and other intelligence. Of these, ASIC contacted 17 RSEs to obtain further information. ASIC also reviewed five RSE audit files, choosing one file from each of the five large audit firms that collectively audit the majority of all RSE financial reports.

As part of our broader financial reporting and audit program, ASIC has recently reissued Regulatory Guide 34 Auditor obligations: Reporting to ASIC. Changes to the guide include consolidating and simplifying guidance on auditor’s obligations to report contraventions to ASIC and reflecting changes to the law. These changes also include making clear that auditors are required to report contraventions when conducting audits of RSEs.

We remind auditors of their obligations to report contraventions to ASIC as we take these reports seriously.

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Kate O’Rourke

Lenders must continue to focus on improving hardship support for customers in financial distress. Despite significant improvements following last year’s landmark review, ASIC has ongoing concerns about hardship practices.

ASIC Commissioner Kate O’Rourke welcomed the progress made by lenders in their approach to customer experience and outcomes outlined in Report 815 Hardship, not so hard to get help (REP 815), released today, following concerns raised by ASIC in May 2024 and published in Report 782 Hardship, hard to get help: Findings and actions to support customers in financial hardship (REP 782).

Examples of improvements by lenders include:

• increased customer awareness of the availability of hardship assistance
• corrections to policies and training materials
• improvements in the identification of hardship notices
• greater flexibility in how information is collected, and
• the removal of default requests for large amounts of customer information.

Following the report in 2024 highlighting poor hardship practices, ASIC required each lender that received tailored feedback to respond with an action plan outlining the proposed improvements. In some cases, ASIC requested external independent assurance that improvements had been implemented and were effective in addressing ASIC’s feedback.

‘Since our review, we have seen lenders work to uplift their hardship practices and to better support their customers experiencing hardship,’ Commissioner O’Rourke said. ‘However, we have some concerns about the overall quality of lenders’ hardship responses.’

‘For example, consumer groups and financial counsellors continue to tell us there are still lenders taking a cookie-cutter approach to hardship, rather than tailoring responses to the customer’s individual circumstances.

‘ASIC will continue to monitor lenders’ actions in this area.’

Commissioner O’Rourke said, ‘We urge all lenders to adopt a proactive, continuous improvement approach to supporting their customers experiencing financial hardship, and to ensure adequate focus on customer experience and outcomes in their practices.

‘Financial hardship assistance continues to be a key focus area for ASIC, particularly as some consumers continue to experience cost-of-living pressures.’

ASIC will continue to monitor the progress of lenders requested to provide action plans, including reviewing the reports from the independent reviewers.

ASIC has taken decisive action against lenders for alleged breaches and alleged contraventions of their obligations towards borrowers, including NAB and its subsidiary AFSH Nominees (25-254MR), Westpac (23-242MR), ANZ (25-201MR) and non-bank lender Resimac (25-081MR) and will take further action where lenders fail to comply with their obligations.

In August 2025, the Federal Court ordered NAB to pay a penalty of $15.5 million for failing to respond to customers’ hardship notices within the time required by law. In September 2025, ASIC and ANZ asked the Federal Court to impose a $40 million penalty on ANZ for failing to respond to customers’ hardship notices within the time required by law and failing to have proper hardship processes in place.

Background

In August 2023, ASIC issued a letter to CEOs of lenders advising of our heightened focus on financial hardship and expectations around their obligations to customers. ASIC also advised of an ongoing data collection from 30 large lenders to understand their financial hardship approaches, as well as an end-to-end review of the hardship policies, processes and practices of 10 of those lenders.

In May 2024, ASIC published the findings of the data collection and the review in Report 782 Hardship, hard to get help: Findings and actions to support customers in financial hardship (REP 782) and its summary version Report 783 Hardship, hard to get help: Lenders fall short in financial hardship support (REP 783). The report showed that while most lenders acknowledged the need to do more – with some already undertaking programs to improve their approaches – most weren’t doing enough.

More information

• Report 782 Hardship, hard to get help: Findings and actions to support customers in financial hardship (REP 782)
• Report 783 Hardship, hard to get help: Lenders fall short in financial hardship support (REP 783)

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