Does my company need an audited financial report?

General advice only · AFSL 222640 · Global Mutual Funds Pty Ltd

The direct answer

Most small proprietary companies do not. Large proprietary companies — broadly those meeting two of three size tests on consolidated revenue, assets and employees — must prepare audited financial reports and generally lodge them with ASIC. Public companies generally must too. Small companies can still be required to by shareholders, ASIC, a lender or an agreement.

What it depends on

The full answer depends on your specific circumstances. Here’s what matters.

Size thresholds

The large proprietary company tests cover consolidated revenue, consolidated gross assets and employee numbers. Check ASIC's current thresholds, which have changed over time.

Ownership and structure

Foreign-controlled small companies and certain registered entities may face different requirements. Group structures are assessed on a consolidated basis.

Contractual requirements

Loan covenants, investor agreements and grant conditions frequently require audited accounts regardless of company size.

The last 10%

What a qualified professional can add

The answer above covers the general position. Here’s where professional judgement — applied to YOUR specific situation — makes the difference.

Testing your company against the current size thresholds
Explaining relief or exemptions that may apply
Planning an efficient first-year audit

Questions to ask before you engage one

If you decide to engage a professional, these questions help you evaluate whether they’re right for your situation.

Do we meet two of the three large proprietary tests this year?

Do any agreements we hold require audited accounts?

How much lead time does a first-year audit need?

What would we need to change in our records beforehand?

Your next step

Check your consolidated revenue, assets and headcount against ASIC's current thresholds before year end, not after.

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