CA ANZ slams move to double reporting thresholds

“Builders, suppliers, distributors, manufacturers and other mid-sized private businesses rely on audited financial statements to demonstrate their financial health to the employees, creditors and customers who depend on them,” she said. 

"The proposed thresholds are multiples higher than where audited financial reporting kicks in for companies in economies like the United Kingdom, Singapore, and the European Union," van Onselen added.

CA ANZ are in support of reviewing thresholds to ensure the pace is kept with the broader economy. van Onselen highlighted that doubling them in a single move, without consultation or economic modelling, warranted far greater scrutiny.

“Removing the requirement for mid-sized companies raises the risk profile of Australia's mid-market significantly,” van Onselen added.

“Audited financial reporting is not red tape. Rather, it is a financial governance mechanism that reduces the need for more prescriptive regulation. When it disappears, the risk doesn't disappear with it, it shifts onto everyone else in the economy.”

Meanwhile, Amir Ghandar FCA, the reporting and assurance leader at CA ANZ, said the policy discussion had been complicated by the Government applying the same thresholds to both financial reporting and climate reporting obligations.

"This debate has become confused because the policy considerations for audited financial reporting are different from those of climate reporting, yet the current model only allows you to choose one set of thresholds," Ghandar said.

"What this means in practice is you potentially end up throwing the financial governance risk baby out with the climate disclosure bathwater, not because climate disclosure isn't important, but because the two regimes have been conflated when they shouldn't be.”

Mid-sized businesses formulate the backbone of local communities, supporting employees, suppliers, along with customers who rely on trustworthy financial data. To protect these significant economic ties, CA ANZ is ultimately urging the government to consult stakeholders and model the full impacts before implementing changes.