Accountancy Europe and IFAC reaffirm commitment to consistent, high-quality sustainability assurance globally. Read full statement.
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On 26 February the European Commission (EC) issued its first Omnibus proposals aiming to simplify several sustainability legislations.
One of the Omnibus proposal is ‘stop-the-clock’ and postpones the Corporate Sustainability Reporting Directive (CSRD) requirements by two years for companies obliged to issues their firsts CSRD reports in 2026 and 2027 (see our CSRD Omnibus factsheet). As a result, mandatory limited assurance engagements under CSRD for these companies will also be delayed by two years.
This move was supported by both the European Council and the European Parliament (EP). The council was first to adopt its position on the Omnibus ‘stop-the-clock’ proposal on 26 March followed by the EP which approved it by a large majority on 3 April 2025. The delays are intended to give companies and assurance providers more time to prepare for the demanding sustainability assurance requirements ahead.
With both the EP and the Council approving the EC’s original proposal without amendments, the draft law now only requires formal approval by the Council before it enters into force. The deadline for transposition is 31 December 2025.
The EP’s economic affairs (ECON) Committee MEPs voted in favour of their annual competition policy draft report.. The legally non-binding document takes stock of and proposes improvements to enhancing the competitiveness of different EU economic sectors. (Results of the vote: 36 in favour, 7 against and 8 abstentions).
During the vote, a number of amendments were tabled by other MEPs to the initial draft report prepared by MEP Lara Wolters (S&D/Netherlands). One of these amendments drew attention to the concentration of the public interest entity (PIE) audit market as well as alleged conflicts of interest, and calls on the EC to prepare an impact assessment “on options to address these concerns”. The report’s calls for action do not oblige EC to take any particular course of action, but nonetheless reflect concerns in some segments of the EP.
As a next and final step, the EP Plenary is currently scheduled to vote on the report’s final version on 5 May.
The European Securities and Markets Authority’s (ESMA) 2024 report on Corporate Reporting Enforcement and Regulatory Activities emphasises the need for greater transparency in audited financial statements and sustainability disclosures. The report calls for improvements in areas such as financial risk disclosures, fair value measurements, and the specificity of climate-related targets and transition strategies. ESMA also made refinements to its enforcement language to better reflect the nature and purpose of its actions, an approach aligned with suggestions from Accountancy Europe. These developments underscore a growing focus on clarity, proportionality, and the usefulness of corporate reporting for stakeholders.
Accountancy Europe has responded to the IAASB’s Post-Exposure Consultation on its Listed and Public Interest Entities (PIEs) Project, supporting efforts to enhance clarity and consistency in the ISQMs and ISAs. Accountancy Europe emphasises the importance of aligning IAASB and IESBA definitions to avoid confusion and inconsistencies. While acknowledging the practicality of allowing locally adjusted definitions for Publicly Traded Entities (PTEs), we express concern that this flexibility might hinder global harmonisation, and we call for additional guidance on the treatment of entities listed in non-regulated markets.
The International Auditing and Assurance Standards Board (IAASB) has released the revised International Standard on Auditing 570 (revised 2024), Going Concern, to enhance auditors’ evaluations of an entity’s ability to continue as a going concern. A significant amendment requires that management’s assessment now cover at least twelve months from the date of approval of the financial statements, extending the evaluation period beyond the previous requirement of twelve months from the financial statements’ year-end.
The International Ethics Standards Board for Accountants (IESBA) has launched a public consultation seeking feedback on proposed revisions to the International Code of Ethics for Professional Accountants. The amendments aim to clarify and strengthen auditor independence requirements for audits of Collective Investment Vehicles (CIVs) and pension funds. The consultation focuses on redefining key terms, including “Connected Parties”, to better reflect the unique structures of CIVs
Accountancy Europe plans to respond to this consultation and to provide input on the proposed changes.
The International Forum of Independent Audit Regulators (IFIAR) has released its 2024 survey of inspection findings, revealing that 34% of audits inspected had deficiencies, up from 32% in 2023. This marks a reversal of the previous downward trend since 2014. The report underscores the need for audit firms to enhance quality management systems, conduct thorough root cause analyses, and implement effective corrective measures. IFIAR emphasises the importance of continuous improvement to ensure consistent, high-quality audits globally.
IFIAR has released a report on the use of technology in audits in which it is highlighted the growing integration of advanced technologies, including artificial intelligence (AI) and generative AI (GenAI), in audit processes.
IFIAR emphasises the necessity for robust governance and oversight mechanisms while acknowledging the potential of these technologies to enhance audit quality. The report advises audit firms to modernise infrastructure prioritising impactful automated tools, and to ensure auditors are adequately trained to maintain control and responsibility over technological applications. IFIAR encourages stakeholders to understand the implication of technological advancement of financial reporting.
The Financial Reporting Council (FRC) has updated its publications in response to the UK Government’s amendments to company size thresholds, effective from 6 April 2025. These changes increase the turnover and balance sheet criteria by approximately 50%, allowing more companies to benefit from simplified reporting and audit requirements. The FRC has released a summary document and revised standards, including updates to FRS 102 and FRS 105, to assist stakeholders in understanding and complying with the new framework.
The Dutch Authority for the Financial Markets (AFM) issued a report on the increase in private equity investments in accountancy firms, now representing approximately 30% of the market excluding Big 6 in the Netherlands. While such investments can offer benefits like economies of scale and enhanced expertise, the AFM warns of potential risks. These include pressures to prioritise rapid growth and profitability, which may compromise the quality of statutory audits. The AFM emphasises the importance of maintaining a balance between commercial interests and public responsibility, urging firms to implement safeguards that ensure audit quality remains paramount.
