A leading Australian company was recently fined $168,000 by ASIC for failing to lodge audited financial reports—because they misunderstood their obligations under the Corporations Act.
Sound like an edge case? It’s not. In fact, we’re seeing it more often than you’d think.
As businesses scale—adding revenue, expanding teams, or taking on new investors—many quietly cross the line into Large Proprietary Company territory. That’s when audits shift from “best practice” to “non-negotiable.”
And here’s the kicker: most directors don’t realise they’re in breach until ASIC gets involved. By that point, the clock’s ticking—and the penalties are real.
So, whether you’re a CFO, director, adviser, or business owner, this article walks you through the key audit triggers, compliance pitfalls, and how Rosenfeld Kant can help you stay one step ahead.
When an Audit Becomes Mandatory: Understanding the Thresholds
Let’s start with the basics.
Under the Corporations Act, a proprietary company is considered “large” if it meets two of the following three thresholds:
- Consolidated revenue of $50 million+
- Consolidated gross assets of $25 million+
- 50 or more employees
Tick two of those? Welcome to audit territory. That means:
- You’ll need to prepare financial reports that comply with accounting standards
- A directors’ report is required
- And yes—an audit must be completed and lodged with ASIC
Still not sure if you meet the threshold? You’re not alone. We speak with CFOs every month who’ve unknowingly crossed into the Large Proprietary category, thinking they’re still flying under the radar.
“We thought we were exempt because we’re not listed.” No. Private companies can absolutely have mandatory audit obligations too.
What Happens If You Ignore It: The $168,000 Compliance Lesson
We know what you’re thinking.
“Surely ASIC isn’t chasing down private companies over technicalities?”
Actually, they are. And they’re ramping it up.
ASIC can fine companies up to $168,000 for failing to lodge audited financial reports—and they’ve been actively doing just that.
One of our clients, a fast-growing investment business, crossed the reporting threshold without realising it. Their revenue and assets crept past the line, but no one flagged it until ASIC sent a late lodgement notice. What followed was a compliance scramble, a fine, and the realisation that it had stalled a pending capital raise.
“Investors pulled back until we had up-to-date audited reports. It was a costly delay—and avoidable in hindsight.”
With Rosenfeld Kant’s help, they:
- Caught up on their audits
- Brought their ASIC records up to date
- Implemented a simple compliance review cycle
The audit was just the start. We helped them get investor-ready again—fast.
Why Audit Demand Is Rising—and Why Rosenfeld Kant’s Team Is Growing
Here’s a stat we’re proud of: Rosenfeld Kant’s audit team has grown by over 50% in the last year.
We’re not just seeing more demand—we’re seeing smarter demand. Businesses are starting to realise that audit isn’t just a regulatory box-tick. It’s a credibility marker.
Here’s what’s driving the uptick:
- Growth-stage companies crossing audit thresholds for the first time
- Startups and scale-ups prepping for funding rounds
- Adviser referrals from law firms and accounting practices
- Private equity deals that demand clean, historical financials
We’re regularly brought in on audit jobs ranging from $20k to $60k+, across industries like:
- Property and construction
- Financial services and funds
- Tech and SaaS
- Healthcare
And it’s not just about compliance. A well-executed audit builds trust, sharpens internal systems, and helps you move faster when it counts.
Common Myths About Audit Obligations
Let’s bust a few myths we hear all the time:
❌ “We’re private, so we don’t need an audit.”
✅ Not true. Once you hit the financial or staff thresholds, you’re in scope—regardless of your listing status.
❌ “We’ve only just hit those numbers, so we’re safe for now.”
✅ Audits apply as soon as thresholds are met—there’s no grace period.
❌ “The worst that can happen is a fine.”
✅ It’s rarely just a fine. Non-compliance can delay deals, damage investor confidence, and even trigger audit qualifications that haunt future years.
Bottom line? It’s far cheaper and easier to get ahead of this than to catch up.
What Should You Do Next?
If your business is growing, or you’re close to any of those thresholds, now’s the time to act—not when ASIC comes knocking.
Here’s what we suggest:
✅ Do a threshold check—revenue, assets, headcount
✅ Review your group structure—consolidation can trip you up
✅ Talk to a specialist—it’s not just about doing the audit, but doing it right
And if you’re an adviser with clients nearing these lines—this is a great opportunity to add value.
Book a Compliance Review With Rosenfeld Kant’s Audit Team.
We help businesses understand where they stand, what they need to lodge, and how to stay audit-ready—without the stress.
📞 Speak to Rosenfeld Kant’s Audit and Assurance team today
🛡️ Get compliant. Stay credible. Sleep easier.
Rosenfeld Kant provides audit and assurance services to high-growth private companies, family offices, and investor-backed businesses across Australia. This article contains general information only. Please seek personalised advice before acting.