Who must maintain auditor / financial reporting (Chapter 2M)?

Large proprietary, public and disclosing entities must prepare and lodge audited financial reports.

Chapter 2M of the Corporations Act requires public companies, disclosing entities, large proprietary companies (any two of: $50M consolidated revenue, $25M consolidated gross assets, 100 employees) and registered managed investment schemes to prepare audited annual financial reports and lodge with ASIC within prescribed timeframes (typically 3-4 months after FY end).

Applies when the business has Chapter 2M reporting status (public, listed or large proprietary). Where the business has maybe large proprietary, check whether you meet 2 of 3 large-proprietary tests (revenue ≥ $50M, gross assets ≥ $25M, 100+ employees).

How the regulator frames it: Public companies, disclosing entities, large proprietary companies, registered MIS.

What triggers it: Meeting the relevant threshold or category.

Jurisdiction: Commonwealth law, so the test is the same in every state and territory.

Outcome across the 35 industries Rules Mate maps (35 of 35: depends on size or structure).

The answer is the same in every industry: depends on size or structure. Industry does not change who must comply.

Size does not change the answer across all industries: at every size band the answer is "depends on size or structure".

Each line is one run of the Rules Mate applicability engine for a single business profile, with the reason the engine gives:

• Pty Ltd company in real estate agents with 500+ employees, turnover $100M–$1B: applies. Large proprietary company (revenue ≥ $50M and 100+ employees — s 45A)
• Pty Ltd company in real estate agents with 6–19 employees, turnover $1M–$3M: does not apply. Requires Chapter 2M reporting status (public, listed or large proprietary)
• Pty Ltd company in real estate agents with 100–499 employees, turnover $10M–$100M: check whether it applies. applies only if you meet 2 of 3 large-proprietary tests (revenue ≥ $50M, gross assets ≥ $25M, 100+ employees)
• Pty Ltd company in real estate agents with no employees, turnover $100K–$1M: does not apply. Requires Chapter 2M reporting status (public, listed or large proprietary)

Starting from a small or large professional services company that does not otherwise meet the test, each of these single facts changes the engine's answer:

• The business is foreign-owned: it then applies (foreign-controlled proprietary company — Chapter 2M reporting).
• The business is listed (or listing) on the ASX: it then applies (listed — a disclosing entity under Chapter 2M).

The engine shows this obligation as "check whether this applies" when a business has maybe large proprietary. It then applies only if you meet 2 of 3 large-proprietary tests (revenue ≥ $50M, gross assets ≥ $25M, 100+ employees). That fact is not something Rules Mate can infer from industry, structure or size.

When due

Annual — typically 3 months for disclosing entities, 4 months for others, after FY end.

Frequency

Annual

Evidence to keep

Audited financial report, directors' report, auditor's report, lodgement via ASIC.

Status

Current

Priority

High

Maximum penalty: Civil penalties + director duty exposure for materially incorrect reports.

Not determined: check with your adviser. Whether an independent review or audit is required turns on facts about the business, so Rules Mate does not assume either way. The facts that decide it: Does the company (with controlled entities) meet 2 of: revenue >= $50m, gross assets >= $25m, >= 100 employees? Is the company a proprietary company under 2 of the 3 large thresholds? Have shareholders with at least 5% of votes directed an audit (s293)? Has ASIC directed an audit (s294)? Is the company foreign-controlled?

• Determine large proprietary company status annually: Test the three large-prop thresholds at the end of each financial year — failing any two triggers Chapter 2M reporting.

Across the 1,890 business profiles Rules Mate evaluates, these obligations apply to most of the businesses this one applies to, and are far more common among them than among businesses generally:

• Comply with corporate whistleblower protections (Part 9.4AAA Corporations Act): applies to 100% of the same businesses (7.7× the overall rate)
• Lodge the ASIC annual company statement and review fee: applies to 100% of the same businesses (4.5× the overall rate)
• Pay ASIC fees + lodge prescribed forms: applies to 100% of the same businesses (4.5× the overall rate)
• Beneficial ownership transparency (Tranche 3 — under consultation): applies to 100% of the same businesses (4.5× the overall rate)
• Pay company PAYG/GST/SG or face Director Penalty Notice (DPN): applies to 100% of the same businesses (4.5× the overall rate)
• Discharge of directors' duties — practical evidence: applies to 100% of the same businesses (4.5× the overall rate)

Rules Mate tracks 2 published obligations tagged "financial reporting", 0 of them rated critical. For a professional services Pty Ltd company with 6–19 employees operating in every state, 1 of those apply outright. This obligation is rated high priority, and is a annual obligation.

Regulated by Australian Securities and Investments Commission.

ASIC: Corporate regulator administering the Corporations Act, financial services and credit licensing (AFSL/ACL), markets supervision, insolvency, and registries (ASIC and ABRS).

• Australian Securities and Investments Commission

Corporations Act: The foundational federal Act for Australian corporate law.

• Corporations Act 2001

Free tools that help with this obligation:

• Compliance calendar builder