Audit update

December 2023


  • Accountancy Europe responds to IAASB’s proposed sustainability assurance standard
  • European Commission responds to Parliament’s Pandora Papers resolution
  • Dutch quartermasters’ final report

Feature story

Accountancy Europe responds to IAASB’s proposed sustainability assurance standard

Accountancy Europe has submitted its comment letter on the proposed International Standard on Sustainability Assurance (ISSA) 5000, General Requirements for Sustainability Assurance Engagements.

We trust that a collective effort by all stakeholders is necessary to achieve comparable, high-quality reporting and assurance. In this regard, we would like to congratulate the International Auditing and Assurance Standards Board (IAASB) for the quality and speed of the progress made in this project.

We believe that ISSA 5000, as a stand-alone, profession-agnostic and principles-based standard, can and should become a global baseline for sustainability assurance engagements.

We encourage the IAASB to continue engaging with European stakeholders and monitor relevant developments on sustainability reporting and assurance, so that ISSA 5000 can be adopted and applied in Europe.

The IAASB should also play its role in the corporate ecosystem’s capacity building given the significance of this ‘new land’ for many stakeholders. This includes working with other parties in the ecosystem to provide support and guidance as appropriate. Accountancy Europe is committed to collaborate with the IAASB in its efforts for responding to public interest issues related to sustainability assurance.

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EU developments

European Commission responds to Parliament’s Pandora Papers resolution

The European Parliament (EP) voted on 15 June on a resolution titled Pandora Papers: Lessons learned. It was prepared by the Member of the Parliament (MEP) Niels Fuglsang (S&D/Denmark). The resolution is legally non-binding.

The resolution calls on the European Commission (EC) to take action against aggressive tax planning, tax evasion, money laundering and sanctions evasion. EC has now provided a response to the resolution, outlining what action – if any – it will take to address MEPs’ concerns.

Among several other points, the resolution also raised concerns about the market concentration in the accountancy sector and called on EC to assess potential conflicts of interest stemming from same firms providing auditing and tax services. In its response to these concerns, EC explains that it “is currently considering the possibility to compile market concentration ratios at the EU level based on information contained in the EuroGroups Register” with the view of analysing the tax advisory market concentration and market share of “accountancy firms”. On separating “accountancy firms from financial or tax service providers”, EC notes that Member States have the option to allow the provision of certain services in alignment with the EU audit legislation. EC concludes that “taking into account market developments following the implementation of this legislation, this is a topic to be investigated as part of a future review of the current statutory audit framework”.

The full EC document is available from this link, under “Documentation gateway” and there the “European Commission” section.

International developments

PIOB certifies the IAASB approval of the ISA for LCE audits

The Public Interest Oversight Board (PIOB) has issued the certification on the International Standard on Auditing (ISA) for Audits of Financial Statements of Less Complex Entities (LCEs) as approved by the IAASB. This follows the PIOB’s oversight of the standard-setting process throughout the full development of the standard.

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National developments

Dutch quartermasters’ final report

The quartermasters’ published their final report on the future of the accountancy sector in the Netherlands. This concludes the work they have been doing since 2020.

The quartermasters’ assignment, as the report says and its title ‘Pressure and Counter Pressure’ indicates, has been the result of the tension that exists and will continue to exist regarding statutory audits. It is the tension between a service (audit) business sector and the public interest. Pressure from the audited company on the auditor, commercial pressure, time pressure and a steadily growing range of tasks. This requires counter pressure – from the auditor himself and his organisation but also from legislators, supervisors, politicians, media etc.

The report includes an overview of the quartermasters’ work and a number of concrete recommendations, in general in the context of improving audit quality. It covers topics such as how is the profession organised, regulated and supervised, structure of audit firms, fraud and going concern, professional secrecy, audit market, culture, innovation and education.

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See also the first response of the Royal Netherlands Institute of Chartered Accountants (NBA) and the Dutch Authority for the Financial Markets (AFM) reaction.


Dutch consultation on transparency and confidentiality of auditors

The NBA has launched a Discussion paper on transparency and confidentiality of auditors for a public comment.

The paper focuses on the tension between the following and how to address it:

  • the society’s increasing calls for more transparency from auditors, i.e. to provide more information about their work and findings than is currently stated in the auditor’s report
  • auditors’ need to comply with the confidentiality rules arising from the relevant legislation and their own professional rules

The consultation period runs until 22 December 2023. Afterwards, a roundtable meeting will be organised in which the various stakeholders will discuss the matter.

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UK: Audit reform omitted from King’s speech

The King’s speech this year included 21 pieces of legislation that are set to be prioritised for the next UK Parliamentary session, but the audit, corporate reporting and governance legislation was not amongst them.

This has been met with disappointment from across the accountancy profession, see here the reaction of the Institute of Chartered Accountants in England and Wales (ICAEW) and here the reaction of the Institute of Chartered Accountants of Scotland (ICAS).

The Financial Reporting Council (FRC) also expressed disappointment while outlining the next steps in its work.

The now stalled reform has been aimed to restore investor and public trust following several high-profile businesses collapses such as that of Carillion, BHS and Thomas Cook.

Other news


This curated content was brought to you by Júlia Bodnárová, Accountancy Europe Manager, Head of EU Audit Regulation, since 2017. You can send her tips by email and connect with her on LinkedIn.