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Legal Penalties for a False Accounting Offence in Canberra, ACT
Andrew Byrnes • April 4, 2025
Accounting is the backbone of any business, ensuring that financial records are accurate and transparent. However, when those records are deliberately manipulated, the consequences can be severe—both legally and financially.
False accounting is an indictable offence under Australian law, and it can have major consequences for businesses and individuals alike. This blog explores the legal implications of false accounting, its penalties, and how authorities investigate and prosecute offenders.
What Is False Accounting?
False accounting occurs when a person dishonestly manipulates financial records to either gain an advantage or cause financial harm. This can involve altering, hiding, or misrepresenting documents that were made or required for accounting purposes. Governed by section 350 of the Criminal Code 2002, this offence can result in a prison sentence and/or a substantial financial penalty.
A person may commit a false accounting offence if they:
- Destroy or hide an accounting document to deceive others and gain a financial benefit or cause a loss.
- Make or help make a false or misleading entry in financial records, or leave out important financial details, with the intent to gain or cause harm.
- Use or present an accounting document that is false or misleading, while being aware that it may not be accurate and doing so to achieve a financial advantage or loss.
These actions must be carried out to obtain a gain or cause a loss to be considered false accounting.
What is Considered an Accounting Document?
An accounting document refers to any financial record, account, or document that is created or required for financial reporting, accounting purposes, or management purposes. This can include:
- Business financial statements
- Tax records
- Profit and loss statements
- Bank statements
- Invoices and receipts
Which Court Handles False Accounting Cases in Canberra?
If someone is accused of a false accounting offence in the ACT, the case may be handled by either the:
- ACT Magistrates Court or the County Court, which can impose a maximum penalty of up to five years in prison and/or a $15,000 fine.
- Supreme Court, where the maximum penalty can reach seven years in prison and/or a fine of 700 penalty units.
The choice of court often depends on the severity of the offence and the circumstances of the case. Working with expert criminal lawyers in Canberra can make a substantial difference in defending against such charges and navigating the complexities of the legal system.
Understanding the New Legislation for False Accounting in Australia
The Australian Government has introduced new laws aimed at cracking down on false accounting, making it a criminal offence under the Commonwealth Criminal Code. These changes are designed to help Australia meet its obligations under an international anti-bribery agreement—the OECD’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
The Bill introduces two new criminal offences related to false accounting offences, which will be added to the Criminal Code Act 1995 (Cth):
1. Intentional False Dealing with Accounting Documents
- This offence applies when someone deliberately alters, destroys, hides, or fails to create an accounting document that they are legally required to maintain.
- The intent must be to hide, facilitate, or disguise an improper financial benefit or loss.
2. Reckless False Dealing with Accounting Documents
- This offence applies when a person engages in the same conduct as above but acts recklessly, meaning they are aware of a significant risk that their actions could facilitate or hide an illegitimate financial transaction and proceed anyway.
Penalties for False Accounting
The proposed penalties are severe:
| Offence | Individuals | Corporations |
|---|---|---|
| Intentional False Accounting | Up to 10 years in prison and/or fines of up to $1.8 million | Fines of up to $18 million, or three times the value of the benefit , or 10% of annual turnover (whichever is highest) |
| Reckless False Accounting | Up to 5 years in prison and/or fines of up to $900,000 | Fines of up to $9 million , or 1.5 times the value of the benefit , or 5% of annual turnover |
The Corporations Act 2001 (Cth) already contains laws related to financial reporting, record-keeping, and corporate accountability. Specifically:
- Requires companies to keep accurate financial records to correctly explain transactions and financial positions.
- Makes it an offence to falsify or conceal financial records, punishable by up to 2 years in prison or an $18,000 fine.
The Role of Corporate Culture in Compliance
Regulators are increasingly focusing on corporate culture when deciding whether to take action against a company. Under the Commonwealth Criminal Code, a company can be held responsible for false accounting if:
- A senior manager authorised or allowed it.
- The company had a corporate culture that encouraged or tolerated misconduct.
- The company failed to put in place proper compliance systems to prevent it.
This means that even if an employee falsifies documents without direct orders, the company could still be held liable if it did not actively promote an ethical financial culture.
Individuals or businesses facing false accounting allegations should seek immediate legal assistance. Legal cases involving financial crimes are complex, and professional representation can significantly impact the outcome. Those dealing with fraud charges may find that having experienced legal counsel ensures their rights are protected and that they understand their legal options.
How the Australian Securities and Investments Commission (ASIC) Might Enforce the Law
Although the Australian Federal Police (AFP) typically investigates offences under the Commonwealth Criminal Code, the Australian Securities and Investments Commission (ASIC) may also play a role. If ASIC discovers false accounting in its investigations into corporate misconduct, it could use its legal powers to obtain documents, question witnesses, and refer cases for criminal prosecution.
ASIC has signalled that it may use these new laws beyond the foreign bribery context, meaning companies could be prosecuted for false accounting even if no bribery is involved.
Final Thoughts
False accounting is a serious crime that carries severe penalties, including large fines and imprisonment. It involves a person dishonestly altering financial records for personal gain or to cause financial harm to another party. Given the complexity of financial regulations, understanding your legal rights and options is crucial. Because false accounting often involves misleading, false, or deceptive financial information, cases are taken seriously by the courts. Depending on the circumstances, the Magistrates Court or Supreme Court will assess the severity of the offence and determine an appropriate penalty.
If you are under investigation or facing false accounting offences, seeking expert legal advice is essential. Andrew Byrnes Law Group specialises in criminal defence, including financial crime cases. Our experienced legal team can guide you through the legal process, ensuring you receive the best possible representation.
Reach out to us to schedule a consultation and take the first step toward a strong defence.
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