Title Make digital financial reporting mandatory, accountants urge Media name/outlet CPA Australia Country/Territory Australia Date 22/02/22 Description Make digital financial reporting mandatory, accountants urge
Media release | 22 February 2022
No digital financial reports have been lodged with ASIC in the past ten years.
Australia’s voluntary regime is limiting the uptake of digital financial reporting.
CPA Australia says make digital financial reporting mandatory for listed companies.
Australian Accounting Standards Board welcomes CPA Australia report into digital financial reporting.
No listed companies have lodged digital financial reports with ASIC in the decade since a voluntary regime was implemented, according to Australia’s leading professional accounting body. CPA Australia says it’s time to make digital financial reporting mandatory for listed companies.
“While other countries have modernised their approach to digital financial reporting, Australia has sat still,” says Dr Jane Rennie, General Manager External Affairs at CPA Australia.
CPA Australia research, published today, shows that 14 G20 countries have implemented mandatory digital financial reporting, including the United States, United Kingdom, France and Germany.
“Among the G20, Australia is a bit of a dinosaur when it comes to digital financial reporting.
“Manual data extraction is expensive, slow, and prone to error. Digital financial statements are machine readable and with aid of digital tools, can be easily and accurately analysed by investors, audit firms, regulators, and others.”
CPA Australia’s research suggests that maintaining a voluntary approach to digital financial reporting is stifling the uptake of digital reporting in Australia.
“We’re urging the government to amend the Corporations Act to make digital financial reporting mandatory for listed companies. Companies, investors, regulators and capital markets will reap the benefits.”
Chair of the Australian Accounting Standards Board (AASB), Dr Keith Kendall, welcomed the publication of CPA Australia’s research. “CPA Australia is to be commended for this important report which highlights the benefits of digital financial reporting for the Australian economy.
“The AASB is actively investigating the prospect of adopting digital financial reporting in Australia. We recently undertook a public consultation on this issue, in light of the recommendations of the Parliamentary Joint Committee Report on the Regulation of Auditing in Australia,” Kendall said.
In markets where digital financial reporting is mandated, capital market efficiency has been shown to improve, while information processing costs decrease.
Rennie said, “For investors, digital financial reporting can improve their ability to analyse, compare and make risk assessments. For regulators, it would improve compliance monitoring and supervision.
“Not every company may be able to make this switch overnight, and we recognise that a limited transition period may be appropriate.”
Download CPA Australia research report, “Digital Corporate Reporting: Global Experiences from the G20 and Implications for Policy Formulation”
Persons Nick Rowbottom