M3: Learner Manual

8. Legal Requirements for Financial Management of Organisations

Companies

A company must keep up-to-date financial records that correctly record and explain transactions and the company’s financial position. Larger companies have additional obligations to lodge financial reports with ASIC.

Generally, companies need to lodge financial reports when:

• There are large sums of money involved.
• The public has invested in the company, or
• The company exists for charitable purposes only and is not intended to make a profit.

All companies must keep some form of written financial records that:

·       Record and explain their financial position and performance, and

·       Enable accurate financial statements to be prepared and audited.[1]