28th February 2023
Investors drive demand for sustainability assurance
Report sets next key goal for driving trust in corporate reporting
Investors seeking to place reliance on corporate sustainability information are driving unprecedented demand for assurance in this emerging area.
This represents a challenge and an opportunity for the global accountancy profession. In response the profession is engaged in determining the framework within which assurance engagements should be carried out and who is best qualified to perform the work.
Using the core assurance skills obtained through the experience of auditing financial statements, the accountancy profession – alongside others performing assurance engagements – is well placed to satisfy this demand.
ACCA’s report Sustainability Assurance – Rising to the Challenge describes the landscape for sustainability assurance and introduces the extant standard and guidance issued by the International Auditing and Assurance Board (IAASB).
Sustainability Assurance – Rising to the Challenge sets out the key issues faced by practitioners providing this assurance work.
ACCA’s research – supported by evidence gathered from a series of virtual global roundtables held in 2022 and 2023, with assurance practitioners and other representatives involved with audit and assurance policy-related matters – sets out seven key messages:
Report co-author, Marianna Rogdaki, Audit & Ethics Lead, ACCA says: ‘ACCA recognises that it can be a real challenge for practitioners new to this area to come to grips with both the risks and the opportunities of taking on sustainability assurance engagements. This report aims to raise awareness of the current landscape as a good starting point for practitioners to get involved.’
She adds: ‘It is clear that the demand for sustainability information is now higher than ever, with regulators across the globe considering mandatory reporting and assurance requirements.
‘Most notably in the European Union, the European Commission has replaced the Non-Financial Reporting Directive (NFRD) with the Corporate Sustainability Reporting Directive (CSRD) introducing mandatory requirements for more entities, alongside requirements for assurance over published information.’
Report co-author, Antonis Diolas, Head of Audit and Assurance, Policy & Insights, ACCA, says: ‘In our roundtable the importance of professional scepticism was noted. Given the immaturity of sustainability reporting, professional scepticism is even more important where subjective statement often forms part of sustainability reports and are not backed up with sufficient appropriate evidence.’
The report commends the IAASB, the International Sustainability Standards Board (ISSB), and the International Ethics Standards Board for Accountants (IESBA) for their respective swift responses to the call for international sustainability reporting, assurance and ethical standards, reducing the risk of fragmentation.
Read the full report here.
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