As we approach the end of the financial year ASIC has reminded directors that “Even though directors do not need to be accounting experts, they should challenge the accounting estimates and treatments applied in the financial report, seek explanations and seek appropriate professional advice supporting the accounting treatments chosen, particularly where a treatment doesn’t reflect their understanding of the substance of an arrangement.”

Related post: ASIC v Healey (Centro) case note

Further information can be found in ASIC Information Sheet 183 Directors and financial reporting (INFO 183) and ASIC Information Sheet 196 Audit quality: the role of directors and audit committees (INFO 196).