Audit Policy

February 2024


  • European business calls for deepening the EU Single Market
  • Global ethical framework is to be set for sustainability reporting and assurance
  • Professional accountancy organisations support the technological transformation of auditing

Feature story

European business calls for deepening the EU Single Market and renewing the dynamic of European integration

29 European organisations, including Accountancy Europe, issued a joint statement that sets out their perspectives and recommendations on 3 EU policy objectives:

  1. Redressing the cost-of-living crisis felt by EU citizens
  2. Improving the EU business environment by addressing obstacles that companies face
  3. Deepening the EU Single Market should be the main political priority until 2030

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EU developments

European Council and Parliament agree on new rules for the insurance sector

European policymakers have reached an agreement on the EU legislation on Solvency II Directive. Accordingly, the balance sheet disclosed as part of the solvency and financial condition report will be subject to an audit by a statutory auditor for all insurance and reinsurance undertakings, apart from small and non-complex undertakings and captive insurance and captive reinsurance undertakings. The statutory auditor will issue a separate report thereon.

Member States have 2 years to transpose this EU legislation and may extend the audit requirements to:

  1. small and non-complex undertakings
  2. captive insurance and reinsurance undertakings
  3. other elements of the solvency and financial condition report.

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Accountancy Europe Factsheet on CBAM

The Carbon Border Adjustment Mechanism (CBAM) is now enforced in the European Union (EU). The new law introduces an import tax on goods such as steel, cement and fertilizers. The legislation is designed to strengthen the EU Emissions Trading System, prevent carbon leakage and ultimately contribute to EU competitiveness.

The Regulation is complex and will heavily impact many businesses, importers, manufacturers, including SMEs. Accountants should be aware of the impacts on their clients and advise them in the CBAM planning and declarations.

Our factsheet aims to support accountants and provides an overview of the CBAM’s main provisions, including on verification.

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International developments

IESBA proposes a global ethics framework for sustainability reporting and assurance

The International Ethics Standards Board for Accountants (IESBA) issued the exposure draft of the International Ethics Standards for Sustainability Assurance (IESSA) and ethics standards for sustainability reporting. IESBA proposes revisions to its Code of Ethics to provide a global framework of ethics provisions for use by all sustainability assurance practitioners regardless of their professional backgrounds, as well as by professional accountants involved in sustainability reporting.

IESBA encourages all stakeholders to provide their feedback until 10 May 2024.

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IESBA sets ethical requirements for using the work of an external expert

IESBA’s proposed revisions to its Code of Ethics aims to guide professional accountants and sustainability assurance practitioners, in evaluating whether an external expert has the necessary competence, capabilities and objectivity in order to use that expert’s work.

The deadline for providing comments on the exposure draft is 30 April 2024.

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IAASB revises its auditing standard on fraud

The International Auditing and Assurance Standards Board (IAASB) proposed revisions to its standard on auditors’ responsibilities relating to fraud: International Standard on Auditing (ISA) 240. Key changes include, among others, clarifying auditor responsibilities relating to fraud and enhancing transparency about auditors’ responsibilities and fraud-related procedures in the auditor’s report.

The consultation is open until 5 June 2024.

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National developments

UK and Switzerland’s mutual recognition of audit qualifications

The UK and Switzerland have made arrangements for mutual recognition of statutory audit qualifications allowing auditors to work more easily in each country, boosting both countries’ audit markets.

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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.