Audit policy update

April 2024


  • New report on the future of Single Market calls for revamping EU audit rules 
  • ESMA Enforcement Report for 2023 
  • Accountancy Europe’s response to Draft XBRL Taxonomy for ESRS Set 1 

Feature story

ISA for LCE event on 18 April 2024 – Recording available

During this webinar, the speakers highlighted the main aspects of the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (ISA for LCE) and provided perspectives on how some European countries are planning to adopt the standard.

The webinar was organised by Accountancy Europe, the European Federation of Accountants and Auditors for small and medium-sized enterprises (EFAA for SMEs), and the International Federation of Accountants (IFAC)in collaboration with the IAASB.

Watch the recording

EU developments

ESMA Enforcement Report for 2023

The European Securities and Markets Authority (ESMA) has issued its Corporate Reporting Enforcement and Regulatory Activities Report for 2023.

The report provides an overview of the ESMA and of national enforcers’ activities in the European Economic Area, when examining compliance of financial and non-financial information provided by issuers.

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Accountancy Europe’s response to Draft XBRL Taxonomy for ESRS Set 1

The European Commission (EC) tasked EFRAG to develop the digital taxonomy for the European Sustainability Reporting Standards (ESRS). The draft taxonomy released by EFRAG represents the digital transposition of the human-readable ESRS Set 1. In our comment letter, we highlighted that:

  • the draft taxonomy adequately represents the ESRS disclosure requirements
  • it can serve as an appropriate basis for the final taxonomy to be developed by the ESMA and EC
  • some of the assumptions made and solutions proposed by EFRAG should be checked for feasibility via feedback from software providers and field testing
  • clear and timely communication by European authorities on the next steps are crucial

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New report on the future of Single Market calls for revamping EU audit rules

Enrico Letta, President of the Jacques Delors Institute, was tasked by EU Member States to produce a report on strengthening the EU Single Market and ensuring its relevance for the future. The report outlines Letta’s recommendations in this regard.  As a follow-up step, EU Member States will prepare their own policy expectations for the next EU Commission on how to develop the Single Market, and they may use Letta’s report and recommendations as a reference.

Additionally, the report highlights specific suggestions regarding the statutory audit market. It regrets the existence of “oligopolies” in several sectors, mentioning audit as one of them, and argues that the situation is particularly challenging for the EU in sectors “dominated by entities whose primary market is outside the [EU] Single Market”. EU efforts to regulate such entities has led to more Single Market barriers, Letta regrets.

The report also raises concerns about national divergencies on statutory audit liability caps. Letta argues that the different national liability caps can, among other issues, create “disparities in professional liabilities which hinder the development of smaller organizations”. He therefore calls upon the EU to address “these disparities”.

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International developments

IAASB’s Strategy and Work Plan for 2024-2027

The International Auditing and Assurance Standards Board (IAASB) published its strategy and work plan aimed at enhancing consistency and quality in global audit and assurance standards.

IAASB’s Strategy and Work Plan for 2024-2027 reflects the crucial role of audit and assurance in fostering trust in the world’s economies.

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IESBA’s Strategy and Work Plan for 2024-2027

The International Ethics Standards Board for Accountants (IESBA) announced the publication of its Strategy and Work Plan for 2024-2027.

IESBA identified two high-priority strategic areas:

  • accounting firm culture and governance
  • exploring the opportunity to extend the impact of the Code beyond the accountancy profession

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Accountancy Europe responds to IAASB’s amendments to its standards

We have responded to the IAASB’s proposed narrow scope amendments to ISQMs, ISAs, and International Standard on Review Engagements 2400, Engagements to Review Historical Financial Statements.

The revisions aim to align IAASB definitions and requirements with the IESBA Code of Ethics and to extend the applicability of existing differential audit requirements for listed entities to public interest entities (PIE).

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National developments

PCAOB proposals on accounting firms’ reporting

The Public Company Accounting Oversight Board (PCAOB-US) issued two proposals for public comment:

  • Public reporting of standardized firm and engagement metrics
  • PCAOB framework for collecting information from audit firms.

The deadline for submitting comments for both consultations is 7 June 2024.

Read more

Other news


This curated content was brought to you by Harun Saki, Accountancy Europe Senior Manager, Head of Assurance, since 2019. You can send him tips by email or connect with him on LinkedIn.