Accountancy Europe explains why auditors fundamentally differ from financial entities and therefore should not fall within DORA’s scope. Read more
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The European Parliament (EP) adopted its position on the CSRD Omnibus proposal with 382 votes in favour, 249 against and 13 abstentions. Interinstitutional negotiations with the Council will begin on 18 November, with a goal to reach a final agreement by the end of 2025.
Below is a brief overview of the key adopted amendments (non-exhaustive):
Revised scope:
Assurance standard:
Voluntary VSME standard:
Sector-specific sustainability reporting guidance:
Other changes:
This vote follows the EP’s October plenary session, where MEPs rejected the Legal Affairs (JURI) Committee mandate to enter trilogues. As a result, MEPs from all political groups were able to table new amendments to the Omnibus proposal by 5 November, which were subsequently voted on during the mini-plenary session on 13 November.
The EC has adopted the Implementing Decision (EU) 2025/1992, confirming that the UK’s Financial Reporting Council (FRC) meets the adequacy requirements under the EU Audit Directive. This decision allows EU Member States and the UK to exchange audit working papers and inspection reports, subject to reciprocal arrangements and appropriate data protection safeguards.
This development enables full cooperation between EU and UK oversight authorities and facilitates joint inspections and cross-border investigations.
The EC will review by 17 January 2026 whether statutory auditors and audit firms should fall under the Digital Operational Resilience Act (DORA) or whether digital resilience requirements should instead be introduced through the Audit Directive.
Auditors were excluded from the final DORA text, but Article 58(3) requires the EC, together with the ESAs and CEAOB, to reassess this.
In its December 2020 response to the EC’s DORA proposal, Accountancy Europe explained why should auditors not be included in DORA.
Auditors:
Auditors already operate under strict standards, including ISQM 1, which requires firms to manage ICT risks through their quality management systems.
Read Accountancy Europe statement
The EC’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) has published the study by CEPS and Milieu on the effectiveness of the corporate governance framework underpinning the quality of corporate reporting.
The study notes that fragmented national governance rules complicate cross-border and group audits, while variations in audit committee independence and expertise affect the quality of auditor oversight and dialogue.
The IAASB released a FAQ document outlining how ISSA 5000 can support quality sustainability assurance engagements in the EU and align with the European Sustainability Reporting Standards (ESRS). It emphasises that ISSA 5000 is framework-neutral, applicable to limited or reasonable assurance, and scalable for entities of all sizes. EU stakeholders were engaged throughout its development.
Adoption in EU Member States depends on future regulatory decisions. The IAASB provides implementation tools and will monitor feedback before issuing further standards
The UK’s Financial Reporting Council (FRC) has launched a public consultation on proposed updates to its Audit Enforcement Procedure (AEP), as part of a comprehensive end-to-end review of its enforcement process.
The proposals would expand the enforcement toolkit from two to five routes by introducing three new pathways: Published Constructive Engagement, an Accelerated Procedure, and an Early Admissions Process.
The consultation document and supporting materials are available on the FRC website, with responses requested by Friday 9 January 2026.
The UK’s FRC has released the 23rd edition of its Key Facts and Trends (KFAT) report, offering a comprehensive overview of the UK accountancy and audit landscape.
The report features data from 31 of the 34 firms with Public Interest Entity (PIE) clients. The report notes continued growth in the accountancy profession, with membership rising both in the UK and globally, despite a slight decline in student numbers.
In the audit market, the report notes an ongoing trend of consolidation, with a decrease in the overall number of registered audit firms.
Despite this, there was an increase in the number of FTSE 350 audits undertaken by firms outside of the Big Four, with 48 now undertaken by non-Big Four firms, up from 41 in 2023.
The UK’s FRC has issued “ISSA (UK) 5000: General Requirements for Sustainability Assurance Engagements” which provides UK companies, investors and assurance providers with a consistent, internationally aligned assurance standards for voluntary use in sustainability assurance engagements.
This standard is voluntary for UK assurance providers and profession-agnostic, aiming to enhance the credibility of sustainability reporting and support informed investment decisions.
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