Requirements For Financial Reporting and Accounting Standards

In Australia, all entities other than small proprietary companies need to prepare their annual financial statements. These annual financial statements will consist of the following:

  • The company balance sheet
  • Statement for profit and loss
  • Cash flow statement. 

All this information needs to be properly revealed in the financial statements of the company, which is usually prepared by the AASB (Australian Accounting Standards Board) and that has got the legal power under the Corporations Law. 

These consolidated financial statements should be prepared by following a certain accounting standard. Normally this occurs in circumstances if the entity is controlling one or also more than one entity. 

The annual financial statements should be circulated to various members of the entity and must also be lodged with the ASIC (Australian Securities and Investments Commission)

Bleen has a list of all professionals related to such activities and you can hire them by referring to this website to prepare the finance report of your company. 

What should be included in your annual report?

Corporate reporting is incomplete without an annual report. The items covered in the yearly reports differ since they are based on unique legislative requirements.

Most annual reports give a basic overview of the operations of the company during the previous year. An annual report normally includes an opening address letter from the company chairman, a business profile, management analysis, and financial details.

You may also hire tax accountants to prepare annual report of your company. Your important company information is kept up to date with the annual reports. Failure by public firms to keep investors and the state informed could result in either late fees or possibly the dissolution of the company.

Disclosing entities must now prepare half-yearly financial statements in addition to annual disclosure requirements. These are usually condensed versions of annual financial statements. Financial statements must be filed with ASIC every six months, but they are not required to be distributed to members.

Both your annual and also half-yearly financial statements should have the following:

  1. It must accompany a report from the company directors about the various operations of the company
  2. It must also accompany a declaration from directors as to whether the statement of accounts complies with the needs of the accounting standards. Also, it must give a fair and true picture of the financial position of the company and whether the company is solvent
  3. It should be audited by a certain registered company auditor (either audited or reviewed if it is half-yearly financial statements) that must be independent of the company.

The following 3 important elements are going to underpin the financial reporting framework of Australia:

  1. Accounting standards for all companies must prepare financial statements
  2. The auditing standards for auditing financial statements and 
  3. Appropriate levels of monitoring and enforcement to make sure that entities prepare and audit their financial statements in conformity with the Corporations Law and also applicable accounting standards.

Therefore, your accurate bookkeeping is a way to go before the preparation of the account statement of any company.