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Under the proposals, registrable superannuation entities ‘RSEs’ are subject to the financial reporting and auditing requirements of Chapter 2M of the Corporations Act, which currently are only applicable to public companies and registered schemes, for financial years commencing 1 July 2022.

If enacted, the proposals will represent significant changes that improve the compliance and transparency of the superannuation sector and will result in changes to RSE processes.


The proposed bill Treasury Laws Amendment (Financial Reporting and Auditing Requirements for Registrable Superannuation Entities) Bill 2021 (PDF 718KB) aims to ensure registrable superannuation entities (RSEs), as defined in the bill, are subject to financial reporting and auditing requirements that are consistent with requirements that currently apply to public companies and registered schemes. If enacted as legislation, the bill will be applicable for financial years (and half-years) commencing 1 July 2022.

The directors of an RSE will be considered to commit an offence if they fail to take reasonable steps to comply with the record keeping and financial reporting provisions of Part 2M of the Corporations Act 2001 (Corps Act) and the approval of the auditor rotation requirements.

Annual and half-year financial reports

The proposed bill requires RSEs to prepare and lodge financial reports for each financial year and half-year for the entity and each sub-fund with ASIC...and to make them publicly available on an RSE’s website.

Previously, there was not a requirement to prepare half-year financial reports for RSEs. Additional guidance may be required to be issued for RSEs given the primary statements and disclosures required in AASB 1056 Superannuation entities are different to AASB 134 Interim financial reports.

Although most RSEs prepare annual general purpose financial statements, given changes to the Australian Financial Reporting Framework, the requirement to comply with the Corps Act will remove the ability of RSEs to prepare 'special purpose' financial statements.

Sub-fund financial statements

The proposed bill requires financial reports be prepared for the sub-funds of an RSE for the first time. A ‘sub fund’ is defined as a segment of the registrable superannuation entity that has the following characteristics:

  • the segment has separately identifiable assets and separately identifiable beneficiaries; and
  • the interest of each beneficiary of the segment is determined by reference only to the conditions governing that segment.

Considering that RSEs often have different type of investment options, may have defined contribution and defined benefit members, or have members from different employers, this assessment may require some judgement in the absence of further guidance being issued.

Directors’ reports

The Directors’ report in an RSE’s financial report includes disclosures about the RSE’s operations and activities, similar to a registered scheme or public company and the following:

  • a copy of the auditor’s independence declaration
  • an audited remuneration report
  • details of any payments made to the auditor for non-audit services
  • if approval has been granted by the directors of a registrable; superannuation entity or a declaration has been made by ASIC for an extension of the auditor rotation requirements.

Corporations Act auditing requirements

The proposal introduces requirements that an RSE appoint an individual auditor to conduct an audit or review of the entity’s financial reports for a financial year and half-year. The auditor would be required to report suspected contraventions to the Regulator; (APRA OR ASIC), meet auditor independence and rotation requirements (ASIC); and prepare, lodge and publish auditor transparency reports (ASIC), if required.

The proposed changes are consistent with the Government’s intention to improve the compliance and transparency of the superannuation sector. The proposals will require changes to RSEs' processes and result in additional costs to the sector.

Dean Waters

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Find out more about the proposed superannuation funds financial reporting requirements that apply to Chapter 2M of the Corporations Act in our reporting update.

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