Australian companies must adopt digital reporting, says CA ANZ

CA ANZ has called for the government to amend the Corporations Act to require disclosing entities to lodge their annual and half-year financial reports in the xBRL digital reporting format.

In a pre-budget submission, CA ANZ said the government should invest in digital reporting infrastructure to support the transition and implementation.

It should also take this opportunity to streamline inefficient and duplicative reporting to different agencies.

The professional body said Australia's listed companies cannot continue relying on paper-based reporting to their shareholders and the government.

"Our nation has fallen behind other major markets around the world, which have required digital reporting for several years," it said.

"Retail investors are demanding digital reporting to make financial reports more accessible and customised to their needs."

CA ANZ said digital financial and investment information in Australia will help streamline business interactions with the government.

"Digital reporting also enables regulatory techniques and third-party scrutiny of financial reporting and auditing, that are currently impractical or impossible within a pdf and paper-based reporting system," it said.

Treasurer Jim Chalmers previously floated the idea of a move to digital reporting back in July 2023, following modelling undertaken by Deloitte Access Economics.

Digital reporting converts financial reports into machine-readable format by assigning tags to information, which enables digital analysis to be automated across large data samples. It also provides new ways to record, measure and verify reports.

The Deloitte report highlighted the benefits of digital reporting for companies, regulators and auditors and emphasised how it could further Australia’s integration into global markets,

Chalmers previously said digital reporting could play an important role as the government prepares to introduce mandatory corporate climate reporting.

Treasurer Chalmers said for the disclosure of material climate risks and opportunities by companies to be beneficial, the information reported needs to be easily accessed, understood and utilised rather than “buried away in PDFs”.

“Digital reporting clearly has a role to play here,” Chalmers said.

“That’s why, as we go about bedding down climate disclosure – we’ll be mindful of making sure our frameworks are flexible enough to incorporate digital climate reporting in the future.”