Corporate Finance Update – Issue 29 – June 2026

Issue 29 of the Corporate Finance Update covers regulatory developments and issues affecting corporate finance activity.

ASIC calls for urgent action on cyber resilience with step change in artificial intelligence capabilities

ASIC is calling on all licensees and market participants to urgently strengthen their cyber resilience measures, as frontier artificial intelligence (AI) intensifies the global cyber risk environment.

In an open letter to Industry (26-092MR), ASIC has urged entities to act now and not wait for advanced AI tools to uplift their cyber security fundamentals and ensure their systems can withstand AI-accelerated threats.

Clients entrust licensees with sensitive and confidential information, and that trust carries clear responsibilities. ASIC expects licensees to be on the front foot to ensure their customers and clients aren’t put at risk by inadequate controls.   

ASIC Commissioner Simone Constant said, ‘In this new world, weaknesses that once seemed isolated can now have a system-wide domino-effect, enabling new forms of exploitation that were previously out of reach for most malicious actors.’

Entities are required to table the letter at their ultimate board and risk governance committees.

The message follows ASIC’s recent court outcome against FIIG Securities Limited (26-021MR), which reinforced the legal case for cyber risk management controls to be demonstrably effective and proportionate to the size, nature and complexity of a business.

Disclosure expectations for listed entities and end of financial year ‘window dressing’

As the end of financial year approaches, ASIC reminds listed entities of their obligations to ensure disclosures are accurate, balanced and not misleading, particularly as market conditions continue to evolve.

Around reporting periods, there is an increased risk that financial results or positions may be presented in a way that gives a misleading impression of performance. This is known as ‘window dressing’. 

Regardless of intent, window dressing may give rise to misleading disclosure, if not appropriately explained to the market.

Entities must ensure that:

• financial information, including earnings results and key metrics, is not presented in a way that is misleading or omits material information
• any significant transactions, adjustments or end‑of‑period positions that have a material impact on results are clearly disclosed and explained, and
• disclosures provide investors with a balanced and accurate picture of underlying performance, particularly where results may be affected by timing or one‑off factors.

Consistent with continuous disclosure obligations, entities must consider whether new information arising in the lead‑up to period end, including changes in trading conditions or performance, requires timely disclosure to the market.

Entities must also consider whether changes in market conditions require updates to prior guidance or other forward-looking disclosures.

ASIC draws attention to recent ASX guidance, which highlights the importance of ensuring that earnings guidance and other forward‑looking disclosures remain appropriate in evolving market conditions.

Ongoing geopolitical tensions and conflicts, including in the Middle East, continue to affect Australian markets and business operations, contributing to volatility, potential energy shortages, supply chain disruption and broader economic uncertainty.

In this environment, listed entities should carefully assess whether their disclosures, particularly earnings guidance, continue to reflect current conditions.

Where geopolitical tensions or other external factors affect business operations, ASIC reminds entities to ensure that forward‑looking statements are supported by a reasonable basis and to review, revise or withdraw guidance as conditions change.

ASIC will continue to scrutinise disclosures made around reporting periods to ensure they provide clear and accurate information that support informed investor decision-making.

Independent Expert Reports should explain and justify valuation methodology

ASIC reminds expert licensees that selecting an appropriate valuation methodology is critical. Independent expert reports (IERs) should clearly explain why the chosen methodology is appropriate in the circumstances and justify the key assumptions applied.

Regulatory Guide 111 Content of expert reports (RG 111) does not prescribe the use of specific valuation methodologies. Experts should apply their skill and exercise professional judgment to select the most appropriate methodology (or methodologies) and must have a reasonable and supportable basis for their choice. IERs should explain why a methodology was adopted, why alternatives were not used or were given more or less weight, and clearly disclose material assumptions, limitations and uncertainties.

ASIC has recently reviewed a number of transactions where concerns were identified in relation to the expert's primary methodology selection and underlying valuation assumptions. In these cases, ASIC required revisions and enhanced disclosure, causing significant transaction delays.

Expert licensees should ensure that methodology selection and supporting rationale are robust and clearly articulated. Where selections are inappropriate or disclosure is insufficient, ASIC may require additional disclosure, or take regulatory action, resulting in transaction delays.

ASIC releases focus areas for financial reporting, audit and sustainability reporting for 2026-27

ASIC has published its surveillance focus areas for financial reporting, audit and sustainability reporting for the 2026-27 financial year. ASIC’s surveillance work is aimed at promoting high-quality, reliable and transparent reporting, and supporting informed decision-making by investors and other users of financial reports.

Financial reporting

ASIC will continue to monitor areas where significant judgement is required from preparers of financial reports. ASIC will review financial reports of listed and unlisted companies, registrable superannuation entities (RSEs) and managed investment schemes (MISs). ASIC will also review the disclosures of companies that have provisions for decommissioning and site-restoration costs.

Audit

ASIC will review 25 audit files during 2026-27. We will continue to focus on the audits of listed and unlisted companies and RSEs, while also including a selection of MISs. Audit files will be selected based on concerns relating to the financial report, potential risk to audit quality, or from a random selection process.

Compliance

In addition to continuing ASIC’s focus on non-lodgement of financial reports by large proprietary companies, ASIC will review registered company auditors’ compliance with their obligations to lodge their annual statements.

Sustainability reporting and assurance

As the sustainability reporting continues to be phased in, ASIC will focus on sustainability reports submitted by entities that are required to prepare a sustainability report for financial years commencing on or after 1 January 2025. ASIC will also engage with large audit firms about their assurance engagement methodology for sustainability reporting.

For more information, see ASIC’s media release.