The Australian Securities and Investments Commission (ASIC) has announced extended deadline for both listed and unlisted entities to lodge financial reports (under Chapters 2M and 7 of the Corporations Act 2001) by one month for balance dates from 23 June to 7 July 2021 (inclusive).
ASIC says the extended deadlines will assist with any pressures on resources for the audits of smaller entities and provide adequate time for the completion of the audit process taking into account challenges presented by COVID-19 conditions. Factors that might affect audit firm resources could include restrictions on travel into Australia and increased staff turnover.
While the extensions would be available for both listed and unlisted entities, the reporting for larger listed entities is unlikely to be affected. However, directors of some smaller and mainly unlisted companies may be asked by their auditors to facilitate the spreading of deadlines for audited full year financial reports.
ASIC says directors should consider the information needs of shareholders and other users of their financial reports, as well as meeting borrowing covenants or other obligations, when deciding whether to depart from the normal statutory deadlines.
It is understood that the deadlines for ASX-listed entities to provide their preliminary final reports are unchanged. Such reports can be unaudited.
The extensions do not apply for reporting for balance dates from 8 January 2021 to 22 June 2021. There does not appear to be a general lack of resources to meet financial reporting and audit obligations for these reporting periods on time. However, ASIC says it will consider relief on a case-by-case basis, where appropriate.
‘No action’ position on AGMs
ASIC has also adopted a ‘no action’ position when public companies do not hold their annual general meetings (AGMs) within five months after the end of financial years that end up to 7 July 2021, but do so up to seven months after year end.
ASIC says the no action position allows additional time for distribution of financial reports to members prior to the AGM for those companies that have relied on the extension of time for lodgement of financial reports.
ASIC says it will continue to monitor how market conditions and COVID-19 related developments are affecting financial reporting, audit and AGM obligations for balance dates after 7 July 2021. It says that, at present, there is no indication that further extensions of time will be necessary.