Australia's corporate regulator has outlined its financial reporting, audit and sustainability reporting priorities for the 2026-27 financial year, with a focus on the quality of reports.
This focus carries implications for large private businesses across the retail and fashion sectors.
The Australian Securities and Investments Commission (ASIC) confirmed it will review the financial reports of listed and unlisted companies, registrable superannuation entities and managed investment schemes. For 2026-27, ASIC's financial reporting review will focus on areas where significant judgement is required from those preparing reports. These include revenue recognition, the assessment of asset impairment, and the recognition and measurement of financial instruments.
The surveillance program is aimed at ensuring the quality and consistency of financial information being reported.
"Our surveillance programs reinforce the importance of high-quality reporting and audit," ASIC commissioner Kate O'Rourke said. "Reliable financial information is critical to transparency in Australia's capital markets and informed investment decisions by investors."
This follows similar crackdowns by ASIC in recent years around financial reporting, which saw a number of prominent fashion businesses come under scrutiny.
Three major fashion brands – White Fox Boutique, M.J. Bale and Aje – were among 12 companies issued infringement notices of at least $187,800 each for allegedly failing to lodge FY24 financial reports with the corporate regulator on time. Across the 12 companies, the fines totalled over $2.2 million, all of which have been paid in full.
More recently, David Jones appears to have lodged its FY24 financial report late, eventually submitting on March 31, 2025. It must be noted that FY24 would have been the first full year that Anchorage Capital Partners owned the department store, after buying it from Woolworths Holdings Limited (South Africa) in late 2022.
Those cases are distinct from the surveillance program ASIC announced this week. But taken together, they point to a broader transparency challenge in Australia's fashion sector, where many of the largest businesses have historically operated without public financial or operational scrutiny.
In its announcement today, ASIC also confirmed it will also specifically review disclosures from companies that carry provisions for decommissioning and site-restoration costs, assessed against new guidance issued by the Australian Accounting Standards Board.
Sustainability reporting is another growing part of ASIC's agenda. The regulator is focused on mandatory climate reports being submitted by Group 1 entities – the first wave of large companies required to report under Australia's new sustainability reporting framework – and is engaging with major audit firms on assurance methodologies.
The federal government has flagged consultation on reforms to reduce reporting burden while maintaining core sustainability requirements, and ASIC has confirmed it will participate in that process.
On the audit side, ASIC will review 25 audit files drawn from a mix of sources: cases where a material correction has been made to a financial report or where ASIC suspects a report may be materially misstated; cases flagged by internal or external data as posing a risk to audit quality, including independence threats; and a random selection.
The regulator will also monitor whether audit firms are actually implementing the remedial actions they committed to following past findings, and is engaging separately with the six largest audit firms over their firm-wide responses to a 2025 report examining auditor compliance with independence and conflict-of-interest obligations.