James Komninos, managing partner at RSM Bird Cameron Perth, said the current rules, as set out by the Corporations Act, are unfair and need to be addressed.
“Under the Corporations Act these businesses must lodge their financial statements with ASIC. However, businesses that are operated through a trust or other structure have no such obligation,” he said.
“This creates an uneven playing field to the detriment of large proprietary companies.”
According to Mr Komninos, the problem with lodging this type of information with ASIC is it becomes public information.
“Competitors and customers alike can look at margins and profitability, leveraging sensitive financial information to the detriment of the company,” he said.
“There is very real reluctance by large proprietary companies to lodge their financial reports, but companies do so in order to comply with their legislative requirements.
“The theory behind having to lodge with ASIC is around assisting users make economic decisions, and specifically the protection of creditors."
RSM Bird Cameron said this can be achieved without making commercially sensitive information available to the wider public through the introduction of a multi-tiered reporting approach.
“For example, limiting the public availability of certain disclosures considered commercially sensitive, thereby reducing the commercial impact of complying with the law,” Mr Komninos said.
“This would be a win-win to satisfy creditors and other users, while not harming the interests of large propriety companies, contributing to the maintenance of a more even playing field and greater competition.”