Background: ASIC, Australia’s corporate regulator, is responsible for keeping companies in line with financial reporting rules and compiance. And while listed companies must disclose their accounts publicly, all large proprietary companiesare also required to lodge audited financial reports with ASIC since 2022.

What happened: Now, ASIC has officially run out of patience. It just issued $2.2 million in infringement notices to 12 well-known private companies. We're talking White Fox Boutique, MJ Bale, Aje and Grill’d for allegedly failing to lodge their audited FY24 financial statements.

What else: These companies were fined up to $198,000 for their breaches. While some execs blamed “administrative oversights”, others blamed “resourcing issues". Either way, ASIC clearly isn’t buying it.

What's the key learning?

💡When the cost of breaking the rules is cheaper than following them, enforcement stops working.
For private companies, filing audited accounts can require hiring bigger finance teams, engaging external auditors, and revealing performance they'd prefer to keep private - so some companies treat fines as a business expense instead of a deterrent.

💡Out of 217 companies ASIC reviewed, 151 were non-compliant, meaning more than 70% failed to lodge their audited financials... a massive gap in transparency for large private businesses.

💡With such large levels of non-compliance, it forces regulators need to raise the stakes. ASIC have now made fines more expensive so that obeying the rules becomes the cheaper...and smarter option.