Australian companies appear to be concealing the more pertinent information when they file their annual business reports as the Australian Securities and Investments Commission (ASIC) observed on its review that corporate declarations are lacking in quality.

To make the business report more credible, ASIC said on Wednesday that companies should endeavour to incorporate their business strategies, financial statistics and significant performance figures that would aid the corporate regulator to better appreciate the documents.

ASIC said that most companies tend to provide analysis on their reports instead of detailed accounts that could give out a better picture on the true state of the firm, which is understandable as corporations usually take so much effort in ensuring that minimal disclosures are contained on their reports.

However, ASIC maintains that such ploy "would not appear to comply with the obligation to provide information members would reasonably require."

For the 2010 financial year, ASIC pored over the reports submitted by 250 listed and 100 unlisted entities and so far the agency found that off-balance sheet investments required closer scrutiny while it stressed that "where arrangements remain off-balance sheet, the details of the arrangements should be disclosed, together with the reasons why they are not on balance sheet."

ASIC added that its deeper look led to inquiries on some companies which claimed to have no influence over a certain firm that turned out to be 50-percent owned by the target of the investigation.

Such findings prompted ASIC to revisit corporate declarations to check on consolidation claims and equity accounts of companies in order to ensure that underlying information are revealed firms are leaving up to their filed reports.

Also, ASIC commissioner Michael Dwyer called on companies and their auditors that "financial reports include all material disclosures necessary for users to understand the financial position and performance of the entity."

Dwyer reminded companies that ASIC gives more premiums on information such as "key assumptions supporting asset values, sources of estimation uncertainty and information on difficult accounting policy choices."

He added that it would not hurt too if company directors could provide supporting data on their reports, which should come in the form of "description of the business model and risks, key business drivers for future performance of the company and asset impairment declarations."