The Federal Government is considering giving ASIC sweeping new powers in a bid to lift the bar on financial reporting. Last week Treasurer Peter Costello unveiled 41 specific recommendations on improving corporate governance and disclosure requirements.

Part of the Government’s CLERP 9 (Corporate Law Economic Reform Program) program, the recommendations include one to increase fines for breaches of the ASX’s continuous-disclosure rules from $200,000 to $1 million.

Other recommendations include making it compulsory for the top 500 listed companies to install an audit committee, forcing accounting firms to disclose all non-audit work in annual reports and forcing companies to respond to “externally generated” rumours affecting share prices.   

But the business world is concerned that ASIC may be given more power than it deserves. Australian Institute of Company Directors CEO John Hall said changes that would see ASIC as the “prosecutor, judge and jury” should be avoided.

The package will be reviewed later in the year to take account of any recommendations arising out of the HIH Royal Commission. The Government will continue to take submissions until November 22, with legislation expected early next year.