News from the AGN EMEA Accounting, Auditing & Education Committee (AAEC)
Sustainability reports must be audited in the future. The audit result must contain statements regarding the following:
Compliance with the CSRD and the ESRS (including the process for identifying reportable information).
Compliance with Article 8 of the EU Taxonomy Regulation.
Compliance with the ESEF Regulation with regard to disclosure in the ESEF format.
With what “intensity” are sustainability reports to be audited?
Initially, only a limited assurance audit is performed; this audit ends with a negative statement.
This is followed by a transition to an audit with reasonable assurance; this audit ends with a positive statement: as soon as the corresponding audit standards are available from the EU. This should be the case by 1.10.2028 at the latest.
The “intensity” of an audit with “limited assurance” is significantly lower than that of an audit with “reasonable assurance”.
According to the CSRD, the following right of choice exists with regard to the auditor of sustainability reports:
The company’s auditor.
An audit firm other than the one auditing the financial statements.
An “independent assurance provider”.
Splitting the audit (auditor audits “everything except the sustainability report” and another auditor audits only the sustainability report) would have the following disadvantages, among others:
Significantly higher audit costs on the part of the audited companies.
The probability of discovering contradictions between financial and sustainability information during the audit would be lower.
In the case of an audit by an “independent assurance provider”, the sustainability report would continue to have the stigma of a “second-class report”.
Should you ever lose track of the big picture, my colleagues and I from the AGN EMEA Accounting, Auditing & Education Committee (AAEC) will be happy to help and guide you safely through the IFRS and CSR jungle. As a member of AGN International, you can use the AGN AAEC Helpline at any time or contact me by email at email@example.com or by mobile phone at +49 173 8710322.
AGN International Ltd is a company limited by guarantee registered in England & Wales, number 3132548, registered office 3 More London Riverside, London SE1 2RE, United Kingdom. AGN International Ltd (and its regional affiliates; together "AGN") is a not-for-profit worldwide membership association of separate and independent accounting and advisory businesses. AGN does not provide services to the clients of its members, which are provided by Members alone. AGN and its Members are not in partnership together, they are neither agents of nor obligate one another, and they are not responsible or liable for each other's services, actions or inactions.
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