The Australian Securities and Investment Commission (ASIC) is demanding clarification from 53 companies - primarily dot-coms and technology businesses - regarding inaccuracies in their financial statements.
The companies, a high number of which are listed on the ASX, have until February 2 to explain the irregularities or risk facing "additional regulatory action, including enforcement".
ASIC chairman David Knott says the biggest discrepancies are in accounting for the acquisition of businesses, the accuracy of quarterly cash flow statements, the reporting and amortising of intangibles, and the recognition of revenues. "Often the disclosure in relation to transactions is confusing and inadequate," says Knott.
ASIC reviewed 140 companies following the tech stock crash in April, on the back of public concern about the standards of disclosure by the new economy sector.