The new financial year has begun, and the finance and accounting industry has been adapting to regulatory changes, shifting from talking about AI to implementing it, protecting individual privacy through additional laws, and increasing reliance on judgemental decisions made by businesses, backed by proper documentation.
While these changes are helping processes move faster, establish stronger controls, and generate more accurate and transparent financial information, they also come with “additional work”.
In this scenario, let’s discuss in detail the 3 major trends currently shaping the finance and accounting industry.
AI-adoption
AI is everywhere. Every business is talking about AI, and while there’s a necessity to adopt AI for businesses to become more efficient, there is also a compulsion to mention it everywhere to make the business more relevant and up-to-date in today’s scenario.
Earlier, AI was a capability utilised by specialised teams, requiring significant data expertise and focused only on specific functions.
Now, AI is accessible across every organisation.
Developers, product teams, support teams, sales and marketing, finance, HR, and operations integrate AI into their day-to-day activities.
Accounts payable, accounts receivable, reconciliations, month-end close, expense management, audit and revenue accounting are a few finance functions where AI can help reduce manual, repetitive work.
The catch is that AI is useful for high-volume, repetitive, rule-based work, but an accountant who has experience in reviewing exceptions, interpreting financial results, making complex accounting decisions, handling compliance, and communicating insights to decision-makers, combined with AI adoption, is needed to achieve better financial productivity.
Sector-specific regulatory reforms
Australia has seen many regulations across various sectors in recent years. Finance teams are facing a wave of reforms across industries. It is crucial for finance teams to stay on top of these regulations and embed them into day-to-day financial activities.
Real-estate/accounting/legal and trust
AML-CTF reforms
The new laws will now expand into industries recognised domestically and globally as high risk of financial misuse by criminals. Financial services are designated services under AML/CTF laws due to their associated risks.
As per the Tranche 2 reform, which is the next phase of Australia’s AML/CTF law updates, the industries/professionals who are brought under the reform are,
- Accountants
- Lawyers
- Real estate agents
- Conveyancers
- Trust and company service providers
- Businesses providing certain virtual asset services
All the above service providers who provide designated services will be regulated by AUSTRAC from July 2026.
Across industries
Payday super
In May 2023, the government announced Payday Super reforms through the Superannuation Guarantee Charge Amendment Bill 2025 and the Treasury Laws Amendment (Payday Superannuation Bill). This reform requires employers to pay super guarantee contributions on payday, ensuring the contributions reach employees’ super funds within 7 business days.
According to the bill, this reform aims to strengthen the Australian Superannuation system and deliver a more refined retirement for the Australian workforce.
Businesses using Automation
Upcoming Privacy Act changes
Under APP 1.7-1.9, a business or organisation covered by the Privacy Act must include additional information in its privacy policy when all of the conditions below apply.
1. A computer program is used to make a decision, or something that is directly related to decision-making.
2.This decision will significantly affect an individual’s rights or interests.
3.Personal information about the individual is used in the program.
The changes to the privacy policy require transparency if any personal information is used in a significant automated decision-making process.
When rules are common across industries, streamlining finance and accounting processes is simpler compared to navigating sector-specific regulations, which require additional oversight.
Accurate financial reporting
Reliable and accurate financial reports are crucial to maintaining transparency in the business, and complying with ASIC’s reporting standards is essential to avoid incurring additional penalties.
ASIC continues to emphasise the importance of high-quality, accurate financial reports in 2026-27 through continued surveillance and review of financial reports from listed and unlisted companies, registrable superannuation entities, and managed investment schemes.
The key focus areas that require significant judgement include,
Revenue recognition: Revenue should be recognised at the appropriate time. If a business signs a contract worth several thousand dollars, revenue shouldn’t be recognised on the day payment is received; rather, it should be recognised when the promised service is delivered.
Asset impairment: ASIC wants to ensure that the assets recorded in a company’s books reflect their correct value as stated in the balance sheet.
If an asset’s recoverable value falls below its carrying value, the company may need to recognise an impairment loss.
Financial instruments:
ASIC is looking at whether the financial assets and liabilities are measured and disclosed correctly.
For example, if a business has significant accounts receivable, it needs to assess whether the receivables are at risk and include expected credit losses in its financial reports.
To summarise, ASIC has increased its focus on financial reporting standards year after year to encourage businesses to make judgemental decisions supported by reasonable, properly documented evidence.
In 2026-27, ASIC expects financial reporting to be more accurate, and if a business makes a judgement-based decision, there’s a need to properly document the reasons for such decisions, which requires more detailed documentation and close attention to the components of the financial statements.
Businesses are accommodating these changes by investing in AI tools and software, strengthening controls and compliance by staying updated with regulations and improving financial reporting processes by maintaining proper documentation, or seeking reliable support that comes with automated processes, resources with knowledge of local laws, and gives you the confidence to scale without adding a burden to your existing team.
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