We have issued two new publications:
They highlight how different the regimes in the relevant areas are in 30 European countries, following the implementation of the 2014 EU audit legislation.
Different national regimes lead to complexity, additional compliance costs and practical and operational difficulties for internationally operating companies and audit firms. Therefore, to create a level playing field, we propose to streamline how:
Refer to the publications for detailed proposals with which we aim to contribute to enhancing the corporate reporting ecosystem.
In this series, we earlier issued papers on streamlining countries’ implementation of EU audit rules on:
With these four publications, we aim to inform policymakers in the context of the European Commission’s (EC) ongoing initiative on corporate reporting. They follow up on our response to the related consultation from earlier this year. See also other related publications, including our recent papers on internal controls and audit quality indicators, here.
This agreement is a major step as financial and sustainability information will be put on an equal footing for the first time in the EU and beyond.
On 29 June, the EU ambassadors approved the political agreement. The EP Legal Affairs (JURI) Committee is expected to vote on the provisional agreement on 14 July.
Some of the main changes the agreement brings are:
The Council has agreed its position on the European Single Access Point (ESAP) proposal.
The aim of this initiative is to improve public access to relevant corporate information. ESAP will centralise entities’ financial and non-financial information and present it in an easy to compare digital format. This will enable investors, financial analysts and intermediaries, public authorities and civil society to have a better understanding of the capital market and make informed decisions.
ESAP does not introduce new reporting obligations but builds on the disclosure requirements in the current EU legislation, including audit legislation. This means that the ESAP platform will contain already established types of data, as well as publicly available information, including:
In its June meeting, the International Auditing and Assurance Standards Board (IAASB) decided to work on an assurance standard for sustainability reporting. The aim is to have an exposure draft in the second half of 2023 which will cover both limited and reasonable assurance engagements.
In the same meeting, the IAASB also agreed to move forward with a separate standard for audits of less-complex entities (LCEs).
The International Ethics Standards Board for Accountants (IESBA) has unanimously resolved to take timely action to develop global ethics and independence standards related to sustainability reporting and assurance.
As a first step, the Sustainability Working Group has been established to perform fact-finding and to develop a strategic vision for the IESBA.
The IESBA is seeking input for its 2024-27 strategy through a survey.
Our response to the survey highlights that:
The UK’s Financial Reporting Council (FRC) has issued a consultation on audit quality indicators (AQIs) to be published by the largest audit firms in the UK.
11 firm-level AQIs are proposed, and they cover various matters such as perceived culture within an audit firm, audit quality inspection results, staff workloads, and the level of partners’ involvement in audit engagements.
Stakeholder views are requested by 18 August 2022.