Our new paper examines how various actors within the corporate ecosystem can identify and mitigate the risks of greenwashing
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The Omnibus Directive entered into force on 18 March 2026. The legislation introduces simplifications to the Corporate Sustainability Reporting Directive (CSRD), with the aim of streamlining reporting requirements for companies.
Member States are required to transpose the CSRD-related provisions into national law by 19 March 2027. The revised rules will apply as from 1 January 2027.
The Committee of European Auditing Oversight Bodies (CEAOB) has published its 2025 annual report, outlining its activities and key developments over the year. The report provides an overview of the work carried out by its sub-groups, including areas such as audit oversight, enforcement, international cooperation and sustainability assurance.
The International Ethics Standards Board for Accountants (IESBA) has published a paper analysing the linkages between its Firm Culture and Governance (FCG) viewpoints and the International Standard on Quality Management 1 (ISQM 1).
The paper explains how the two frameworks are mutually supportive while maintaining distinct objectives, scope and level of detail. It highlights how ISQM 1 requires firms to establish robust quality management systems, while the FCG viewpoints focus on strengthening ethical culture through eight governance elements.
The IESBA has launched a new workstream to examine the ethical and independence implications of private equity investment in accounting firms. The initiative aims to assess whether standard-setting is needed to address alternative practice structures, including those involving private equity.
This topic has also been explored by Accountancy Europe, which has published work analysing trends and risks and opportunities of private equity investment in the profession. An update on the workstream is expected by IESBA in June 2026.
The IESBA has launched surveys as part of its post-implementation reviews of the NOCLAR standard and the Restructured Code. The initiative aims to gather feedback from stakeholders on the effectiveness, clarity and implementation of these standards in practice.
The findings will inform the Board’s assessment of whether any follow-up actions or further work may be needed.
The Financial Reporting Council (FRC) has published new guidance to support audit firms in adopting generative and agentic AI technologies in audit engagements.
The guidance aims to help firms balance innovation with the need to maintain audit quality, providing a framework for assessing and building confidence in AI-generated outputs. It highlights key risks, including misuse, deficient outputs and non-compliance with auditing standards, alongside potential mitigation measures.
Importantly, the FRC emphasises that responsibility for audit quality remains with human auditors. The guidance seeks to promote consistent practices and support the responsible integration of AI within firms’ quality management frameworks.
FRC has outlined next steps following its SME audit market study, identifying key challenges in the sector, including the scalability of auditing standards, supervisory approaches and the use of technology.
A central measure is the introduction of Practice Note 28, providing guidance on how International Standards on Auditing (ISAs) can be applied more proportionately to SME audits. Additional actions include further guidance on ethical standards, the establishment of a technology sandbox, and initiatives to enhance audit supervision and communicate the value of audit to SMEs.
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