Reporting Regulatory Priorities for FY2026–2027 Announced
Source: Australian Securities and Investments Commission media release 26-098MR; published on 18 May 2026.
The Australian Securities and Investments Commission (ASIC) announced its regulatory priorities for financial reporting, audit, and sustainability reporting for FY2026–2027 on 18 May 2026. The financial year covers the period from 1 July 2026 to 30 June 2027. The regulatory arrangements show that ASIC will include listed companies, unlisted companies, registrable superannuation entities, and managed investment schemes within its reporting review scope, with the reliability of financial information, audit quality, and the implementation of mandatory climate reporting serving as key regulatory themes.
“Our regulatory program highlights the importance of high-quality reporting and audits. Reliable financial information is essential to the transparency of Australia’s capital markets and to investors making informed investment decisions.”
ASIC said its reporting supervision program is designed to promote high-quality, consistent, and comparable financial information. Through financial report reviews, audit file inspections, annual lodgement compliance checks, and sustainability reporting supervision, the regulator aims to maintain the disclosure foundation of Australia’s capital markets and provide investors with a more reliable information environment for assessing companies’ financial positions.
Financial Report Reviews to Focus on Areas Involving Significant Judgement
In FY2026–2027, ASIC will continue its long-standing financial reporting priorities, focusing on areas where financial report preparers are required to make significant judgements and estimates. Regulatory priorities include revenue recognition, asset impairment assessments, recognition and measurement of financial instruments, and disclosures that have a material impact on investors.
For revenue recognition, ASIC will focus on whether entities recognise revenue and deferred revenue in line with the substance of transactions and performance obligations, and whether the related accounting judgements have a reasonable basis.
For asset impairment, ASIC will focus on goodwill, indefinite-life intangible assets, intangible assets not yet available for use, and non-financial assets that are more significantly affected by the economic environment.
For financial instruments, ASIC will focus on whether the classification of financial assets, measurement methods, and expected credit loss estimates comply with applicable accounting standards.
For disclosures, ASIC will focus on whether entities adequately explain estimation uncertainty, changes in key assumptions, and sensitivity analyses, while avoiding boilerplate wording that lacks entity-specific context.
ASIC will also review disclosures by companies that recognise provisions for decommissioning and site restoration costs. The relevant assessment will refer to new guidance issued by the Australian Accounting Standards Board (AASB), including Example D inAASB 137: Provisions, Contingent Liabilities and Contingent Assets. This arrangement means mining, energy, infrastructure, and other companies with rehabilitation or restoration obligations may face more detailed scrutiny of provision assumptions and disclosures.
| Regulatory Area | Timeframe | Entities Covered | Key Focus |
|---|---|---|---|
| Financial reporting | 1 July 2026 to 30 June 2027 | Listed companies, unlisted companies, RSEs, MISs | Revenue recognition, asset impairment, financial instruments, and restoration cost provision disclosures |
| Audit inspections | FY2026–2027 | Audit firms and related audit files | Review of 25 audit files, follow-up on remediation measures, and audit quality risks |
| Compliance activities | FY2026–2027 | Large proprietary companies and registered company auditors | Failure to lodge financial reports and compliance with auditors’ annual reporting obligations |
| Sustainability reporting | FY2026–2027 and subsequent reform window | Group 1 reporting entities and large audit firms | Mandatory climate reporting, assurance approaches, exemption applications, and use of educational materials |
Audit Supervision to Inspect 25 Audit Files
ASIC confirmed that it will review 25 audit files in FY2026–2027. The regulatory targets will remain focused on listed companies, unlisted companies, and registrable superannuation entities (RSE), while also including selected managed investment schemes (MIS). This arrangement indicates that, beyond traditional corporate audits, ASIC will continue to expand its focus on audit quality related to superannuation and investment schemes.
Audit files will be selected from multiple sources, with the regulator combining financial reporting risks, audit independence risks, and random sampling.
If a financial report involves a material restatement, or if ASIC considers that a financial report may contain a material misstatement, the related audit file may be included within the inspection scope.
If internal or external data indicates audit quality risks, including threats to audit independence, the related files may be included in the review sample.
ASIC will also select certain audit files through a random selection process to broaden regulatory coverage and identify audit issues in non-targeted samples.
ASIC stated that audit firms responding to regulatory inspection findings will need to explain the remediation measures they intend to take. In FY2026–2027, the regulator will further monitor and report on audit firms’ implementation of remediation actions. At the same time, ASIC is engaging with the six largest audit firms to understand their firm-level actions in response toReport 817: Building trust: Auditors’ compliance with independence and conflict of interest obligations.
Failure by Large Proprietary Companies to Lodge Financial Reports Remains a Compliance Focus
In terms of compliance activities, ASIC will continue to focus on large proprietary companies that fail to lodge financial reports. The regulator has identified non-lodgement of financial reports and auditor misconduct as enforcement priorities because such conduct weakens market transparency and affects the ability of creditors, investors, and other stakeholders to access corporate financial information.
ASIC will also review whether registered company auditors have complied with annual report lodgement obligations. This obligation is regarded as a basic requirement that supports audit quality and auditor capability. The regulatory arrangements show that auditor registration status, compliance with annual reporting obligations, and independence requirements will remain foundational elements of ASIC’s audit supervision framework.
Climate Reporting Supervision Enters Initial Reporting Review Stage
For sustainability reporting, ASIC said it has adopted guidance, exemptions, and educational materials to support entities in complying with the sustainability reporting framework. Under Australia’s mandatory climate reporting regime, eligible entities are required to lodge sustainability reports containing climate-related financial information and prepare the relevant content in accordance with requirements such asAASB S2: Climate-related Disclosures.
ASIC has updated its frequently asked questions on sustainability reporting reviews and audits to respond to legal changes and stakeholder questions. The regulator has also provided sustainability reporting exemptions for relevant schemes and continues to update the exemption decisions register. Initial observations on sustainability reports already lodged will help entities with 30 June reporting periods prepare their first sustainability reports.
Sustainability reports lodged by Group 1 entities will be a key focus of ASIC’s supervision of the mandatory climate reporting framework.
The sustainability reporting assurance approaches of large audit firms will continue to receive regulatory attention.
Reform consultations proposed in the government budget aim to reduce reporting burdens while maintaining the core sustainability reporting requirements.
Before the relevant reforms are formally implemented, ASIC will continue to administer the mandatory climate reporting framework.
Three Regulatory Reports Published in 2025 Form the Policy Background
ASIC stated in the announcement that three regulatory reports published in 2025 form an important background to the FY2026–2027 regulatory arrangements. These reports cover the supervision program and supplementary work conducted from 1 July 2024 to 30 June 2025, and indicate that there remains room for improvement in financial reporting and audit quality.
Report 816: ASIC’s review of superannuation funds’ financial reporting and auditfocuses on the financial reporting and audit quality of superannuation funds.
Report 817: Building trust: Auditors’ compliance with independence and conflict of interest obligationsfocuses on auditors’ independence and conflict of interest obligations.
Report 819: ASIC’s financial reporting and audit surveillance 2024–25summarises the results of financial reporting and audit supervision in the previous regulatory cycle.
From the perspective of ASIC’s regulatory approach, the regulator will advance both targeted reviews and risk screening in FY2026–2027. Financial report preparers need to strengthen documentation for significant accounting judgements, directors and superannuation trustees need to ensure financial reporting quality, and audit firms need to maintain professional scepticism around high-risk areas and develop executable remediation measures in response to regulatory findings.
Key Questions on ASIC’s New Financial Year Reporting Supervision
Which period do ASIC’s newly announced regulatory priorities cover?
The regulatory priorities cover FY2026–2027, from 1 July 2026 to 30 June 2027. ASIC issued the related media release on 18 May 2026.
What are the core areas of financial report reviews for FY2026–2027?
The core areas include revenue recognition, asset impairment assessments, recognition and measurement of financial instruments, provision disclosures, and matters in financial reports involving significant judgements and estimation uncertainty.
How many audit files will ASIC inspect as part of its audit supervision?
ASIC plans to review 25 audit files in FY2026–2027, with samples drawn from high-risk financial reports, audit quality risk indicators, and random sampling procedures.
Why has sustainability reporting become a regulatory priority?
Australia’s mandatory climate reporting framework is being implemented in phases. ASIC will continue to administer the framework before the reforms are completed and will focus on sustainability reports lodged by Group 1 entities and the assurance approaches of large audit firms.
