Accountancy Europe calls on the IAASB to achieve progress towards a draft standard for auditing less-complex entities
Accountancy Europe sent a letter to the International Auditing and Assurance Standards Board (IAASB), ahead of its crucial meeting, calling for progress towards a draft standard for auditing less-complex entities (LCEs).
This is especially urgent as:
- we have observed increasing audit thresholds in Europe
- countries have started developing their own LCE audit standards
- the corona crisis has put LCEs/SMEs at heightened going concern risks and auditors need fit–for–purpose standards to be able to bring credibility to suppliers or lenders using their accounts
We believe in using the existing ISA framework to draft a standard that is no longer too complex for LCEs’ needs as the current ISAs are. This will ensure consistent audit approaches globally.
During its meeting in the week of 15 of June, the IAASB decided to move forward with both workstreams as suggested in this agenda paper from the meeting:
- ISA focused workstream
- separate standard workstream
Setting up for high-quality non-financial information assurance in Europe
Non-financial information (NFI) is vital for companies and stakeholders to make sound business decisions. It makes environmental, social and governance impacts transparent to support moving to more sustainable economies.
As the importance of NFI is growing, stakeholders also need to know if the information can be trusted. Independent, external assurance enhances the reported NFI’s reliability, strengthens confidence in markets and contributes to the global sustainable finance objectives.
Our new publication explores 3 conditions to develop and ensure high-quality NFI assurance:
- EU regulatory framework mandating assurance
- professional standards applicable to all assurance service providers
- public oversight of assurance service providers
Response to the European Commission’s consultation on the Non-Financial Reporting Directive revision
We have responded to the European Commission’s (EC) public consultation on the Non-Financial Reporting Directive (NFRD) revision. In our response, we highlight the following to the EC:
- A common comprehensive NFI standard is necessary to achieve high quality information and to tackle current issues in NFI reporting
- Expand scope beyond public interest entities based on significance of the impact on the environment and society
- Material disclosures as part of the management report
- Mandate assurance across the EU
- Apply gradual approach, but there should be the same level of assurance over NFI as for financial information
- Define the subject matter within the NFRD