Southern Steel Group Pty Limited (Southern Steel) has re-lodged its financial report for the year ended 30 June 2023 after ASIC’s inquiries.

Southern Steel is a large proprietary company, required to prepare an audited financial report, but was exempt from lodging it with ASIC under ‘grandfathering’ provisions. Following amendments made by the Treasury Laws Amendment (2022 Measures No. 1) Act 2022, ‘grandfathered’ proprietary companies are now required to lodge their financial reports with ASIC for financial years ending on or after 10 August 2022.

When Southern Steel initially lodged its 30 June 2023 financial report, the financial report failed to include comparatives for the 30 June 2022 financial year which is a requirement of accounting standards.

ASIC raised concerns with Southern Steel that they had failed to comply with the requirements of AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.

After these discussions, Southern Steel agreed to re-lodge its 30 June 2023 financial report with comparatives.

ASIC’s concerns were identified as part of its financial reporting and audit surveillance program.

Background

ASIC’s financial reporting and audit surveillance program aims to improve the quality of financial reporting and to ensure financial reports have been prepared in accordance with the law, supporting investor confidence and the integrity of Australia’s capital markets.

Financial reports must be prepared in accordance with the Corporations Act and comply with accounting standards. Where we identify non-compliance, we will seek either re-lodgement or re-statement of the accounts to ensure the investors and other stakeholders have accurate information about the financial performance and financial position of the company.

ASIC has adopted a new integrated approach to conducting financial reporting and audit surveillances, which focuses on the entire financial reporting chain. In addition to auditors, it makes other stakeholders (like financial report preparers and audit committees) more accountable for the quality of the financial report and audit. ASIC conducts regular reviews on a risk-basis of the financial reports of selected companies to monitor compliance with the Corporations Act and Australian Accounting Standards.

In addition to listed companies and other public interest entities, ASIC’s reviews cover some large proprietary companies and now includes those previously ‘grandfathered’.