Key points
- ASIC has updated its enforcement priorities for 2026 – and there is an increase in ASIC action
- There is a focus on financial misconduct, including significant penalties for any infringement notice
- Non-lodgement is a strict liability offence
ASIC recently announced its recent enforcement priorities – one of which is financial reporting misconduct including failure to lodge financial reports (and/or late lodgement).
ASIC activity is on the rise, and there have been numerous recent cases of substantial fines incurred by businesses who allegedly failed to lodge. In fact, ASIC has named 12 entities who collectively incurred over $2.2 million in infringement notices for alleged failure to lodge.
What can you expect in a penalty, and what should you do?
A company has an obligation to lodge audited financial reports with ASIC under s319(1) of the Corporations Act 2001 (Corporations Act) – non lodgement is an offence of strict liability. Based on the applicable penalty at the time of the alleged offence, the maximum penalty a court can impose is $375,600 for each offence. Strict liability offences in the Corporations Act are infringement notice provisions and are issued at half the maximum penalty that a court could impose for the contravention.
Clients who have reporting obligations under the Corporations Act should consider whether they have inadvertently not lodged Remember, that without a deed of cross guarantee or other lodgement relief arrangements, a company must meet their reporting obligations.
Frequently asked questions
What to do if your entity receives an ASIC communication on late lodgement?
We recommend opening dialogue with ASIC as soon as possible to develop a plan to lodge, this may include extensions of time subject to negotiation. Missing a deadline set by an ASIC notice is likely to lead to further action.
What to do if your entity believes it will be late to lodge?
We recommend opening a dialogue with ASIC as soon as possible to develop a plan to lodge.
What to do if you have missed an ASIC notice deadline?
We recommend opening a dialogue with ASIC as soon as possible as the issue is unlikely to be resolved favourably without proactive action from the company and agreement with ASIC.
How does this fit with the recent RG34 auditor obligations changes?
As part of the recent RG34 changes, ASIC considers a suspected failure to lodge a financial or sustainability report is a significant contravention (violation). It should be reported to ASIC:
- for listed entities or disclosing entities—if the report has not been lodged by its due date; (i.e. 1 day late the auditor should report) or
- for all other entities – if the report remains outstanding 28 days after its due date. (so there is no need to report if between 1 and 27 days late but from day 28 an auditor should report).
While this is an auditor’s responsibility clients should stay informed – because mismanagement of reporting could trigger an infringement notice and/or other action from ASIC.
How do you know if you are required to lodge financial reports with ASIC?
As per Section 292 of the Corporations Act, the following entities are required to prepare financial reports:
- all disclosing entities
- public companies
- companies limited by guarantee (except small companies limited by guarantee)
- all large proprietary companies that are not disclosing entities (Are you a large or small proprietary company?)
- all registered managed investment schemes
- small proprietary companies that are foreign-controlled
- small proprietary companies that have one or more crowd-sourced funding shareholders at any time during the year.
The following entities may also be required to prepare financial reports:
- small proprietary companies that ASIC direct to prepare financial reports
- small proprietary companies that shareholders direct to prepare a financial report
- small companies limited by guarantee subject to a member direction under section 294A of the Corporations Act.
You can also refer to the ASIC website for more in-depth information.
What’s next
If you still have questions regarding your lodgement expectations and how these updates may impact you, reach out to your Pitcher Partners expert.
