Under Australia's Corporations Act 2001 (Act), directors of companies are required to ensure that the financial statements are true and fair.  The Centro case, whilst not representing a change in law, serves to clarify the roles and responsibilities of directors of Australian public companies in relation to financial reporting.

The Centro case focused on the classification of liabilities and the disclosure of guarantees.  Justice Middleton found that in approving the financial statements, each director failed to take all reasonable steps required of them under the Act, noting they should have known the nature of the liabilities, should have been aware of the relevant accounting principles and should have made relevant enquiries.

The G100 publication provide background to the Centro decision, and identifies areas of focus for directors in the financial reporting process.  It also includes guidelines to assist CFOs in assisting the directors in the process.

Click for The Centro Experience — A wake up call for directors (link to G100 website).