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Australian company audit, financial statements, accounting, consulting in Australia

Australia is a state in the southern hemisphere, occupying the continent of the same name. The official form is the Commonwealth of Australia. Highly developed post-industrial state, attractive for investments. It is an open market with minimal restrictions on imports of goods and services. Australia has a global principle of taxation: resident companies pay tax on worldwide profits, while non-resident companies pay tax on profits earned in the country or from sources within the country. At the same time, most legal entities are required to submit annual financial statements to the competent state authorities.

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Service packages Legislation Tax System Audit Services
Preparation and submission of accounts
USD 100 – 400 per hour
Audit of financial statements
from 5 000 USD

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General requirements

According to legislation of Australia, all companies must make financial statements, but not all companies must file accounts with state authorities of Australia. Normally, companies must file accounts if:

  • significant amounts of money are involved;
  • the company is public;
  • the company only exists for charitable purposes and has no purpose of making profit.

According to article 292 of the Corporations Act 2001, the following entities must file financial statements:

  1. all disclosing entities, i.e. companies that issue enhanced disclosure securities, where the number of shareholders is over 100;
  2. public companies;
  3. companies limited by guarantee (except for small companies limited by guarantee);
  4. all large private companies that are not disclosing entities;
  5. all registered managed investment schemes;
  6. small private companies with foreign capital;
  7. small proprietary companies that at any time during the year have one or several crowd-sourced funding shareholders.

The following entities may also be obliged to file financial statements:

  1. small private companies that prepare accounts at the request of the Australian Securities and Investment Commission (ASIC);
  2. small private companies that prepare financial statements at the request of shareholders;
  3. small companies limited by guarantee, in accordance with members’ instructions (article 294A of the Corporations Act).

Accounts shall be prepared in accordance with the Australian financial reporting standards adopted in 2005, which conform with the requirements of the International Financial Reporting Standards (IFRS).

In certain cases, some companies are exempt from the requirement to provide financial statements, for example, if:

  • the company has already presented financial statements to ASX, NSX, SIM VSE or SSX and all requirements of ASIC Corporations (Electronic Lodgment of Financial Reports) Instrument 2016/181 are complied with;
  • the small private company is under foreign control, but the foreign company that is in control is registered by ASIC as a foreign company and provides consolidated financial statements that include activity of the Australian company during the period when the control exists;
  • the small private company is controlled by foreign companies that are not part of a large group.

Time frame for preparation and submission of financial statements and a tax return

According to article 319 of the Corporations Act, all companies must file accounts within 4 months after the end of the financial period, except for disclosing entities, which must report within 3 months after the end of the financial year.

If a company did not conduct any business, it is still obliged to report on the “zero” period.

Liability for late filing

The penalty for late filing of accounts is 900 AUD for small entities and 4 500 AUD for large entities.

Audit requirement

Audit is compulsory for large companies until they are exempt from filing by ASIC.

To be considered large a company must meet 2 of the following conditions:

  • annual turnover is over 50 000 000 AUD;
  • net assets are over 25 000 000 AUD;
  • over 100 employees.

Consolidated financial statements

If an Australian corporation has subsidiaries, it must prepare consolidated financial statements and file them with ASIC.

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