Question

What aspects of legislation can impact upon financial transactions and reporting (in Australia)? (Please type up your answer)

Answer 1

Financial reporting in Australia

Australia aims to promote investor confidence and integrity in the economy, corporations and in capital markets. A proponent of this is clear and consistent financial reports prepared in accordance with legislative requirements.

The same reporting standards apply in all Australian states and territories. Businesses in Australia may be required to report to the Australian Taxation Office (ATO), the Australian Securities and Investments Commission (ASIC) and/or the Australian Securities Exchange (ASX).

Further information on the key financial reporting requirements is provided below.

Business Activity Statement

Businesses operating in Australia are required to lodge a Business Activity Statement (BAS) to the Australian Taxation Office (ATO) to make payments and report their tax obligations. Certain individuals may also be required to lodge a BAS.

The BAS is personalised to each business (or individual). It can be lodged electronically, by mail or in person. A BAS needs to be lodged monthly, quarterly or annually depending on when instalments are due.

For more information, see business.gov.au: Reporting Activity Statements.

Financial reporting requirements

The Australian Securities and Investments Commission (ASIC) is Australia’s corporate, financial markets and financial services regulator.

Companies operating in Australia are required to prepare and lodge financial reports with ASIC, usually at the end of the financial year. Annual financial reports are required to be audited. In some circumstances, companies may be exempt from financial reporting.

For more information on financial reporting requirements, see ASIC’s guide to Financial Reports.

Australian Stock Exchange reporting requirements

Companies listed on the Australian Securities Exchange (ASX) are bound by continuous and periodic disclosure rules. The ASX provides information on these requirements in its Listing Rules.

For information on reporting requirements, see ASX Listing Rules.

Australian Accounting Standards

Australian Accounting Standards are set by the Australian Accounting Standards Board (AASB), an independent Australian Government agency. The standards are legislative requirements for corporations. They must also be applied to all other general purpose financial reports of public and private sector reporting entities.

The Australian Accounting Standards meet the requirements of the International Financial Reporting Standards (IFRS). Whilst much of the standard-setting is the responsibility of the International Accounting Standards Board (IASB), the AASB maintains standard-setting power over matters specifically relating to Australia.

For more information, see AASB: Accounting standards.