Audit Policy Update

• Accountancy Europe’s webinar – Towards digital corporate reporting with CSRD 
• Commission publishes delegated act on Digital Services Act audits 
• Accountancy Europe has responded to the latest IAASB and IESBA consultations 
• FRC launches conversation starters to encourage investor-audit committee engagement

Accountancy Europe’s webinar – Towards digital corporate reporting with CSRD

Accountancy Europe organised a webinar to explore the opportunities and challenges in the journey towards digital corporate reporting and assurance in Europe on 16 May 2023. 

Experts from relevant stakeholders: 

• explained lessons learnt from the European Single Electronic Format (ESEF) experience 
• proposed suggestions on how to prepare for the Corporate Sustainability Reporting Directive (CSRD) implementation 
• highlighted the importance of European Single Access Point (ESAP) for the users of corporate reporting 

Read more and watch the event recording

JURI Committee reaches agreement on due diligence Directive

The European Parliament’s (EP) Legal Affairs (JURI) Committee adopted its final position on the Corporate Sustainability Due Diligence Directive (CSDDD) on 25 April. Key points in JURI’s position:  

• scope captures more companies than the initial proposal of the European Commission (EC), lowering the threshold to 250 employees and a worldwide turnover of over €40 million  
• ‘value chain’ definition covers all upstream and downstream activities, including the marketing of products  
• directors shall put in place and oversee the due diligence actions   
• the inclusion of the financial sector is subject to further restrictions  
• risk prioritisation of adverse impacts is added as a new provision   
• minimum requirements for due diligence verification providers are established. The third-party verification providers can be an auditor/audit firm, an independent assurance provider in line with the EU Audit Directive or an independent third party that is accredited in a Member State for conducting certifications  

The EP is expected to confirm its mandate on 1 June as a next step. The trilogue negotiations with the Council will follow.  

Accountancy Europe published a statement welcoming the adoption of JURI’s position and setting the tone for the trilogue negotiation.

Commission publishes delegated act on Digital Services Act audits

The EC published its delegated regulation for the audit aspects of the Digital Services Act (DSA) proposal on 5 May.  

This delegated regulation aims to set out the rules for the procedures, methodology and templates used for the audits of very large online platforms and very large online search engines as required under the DSA (Article 37). 

Stakeholders have until 2 June to provide feedback on the delegated act.  

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IAASB proposes revised auditing standard on going concern

The International Auditing and Assurance Standards Board (IAASB) issued proposed revisions to its current standard, International Standard on Auditing (ISA) 570, Going Concern.  

The IAASB invites all stakeholders to comment on the consultation until 24 August 2023. Accountancy Europe will be responding to this consultation. 

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Accountancy Europe responds to IAASB’s consultation on less complex groups

The IAASB proposed a group audit-specific section to its draft auditing standard for less complex entities (LCEs).  

Our response invites IAASB to finalise the standard as soon as possible and to reconsider the prohibitions on the use of the standard.  

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Accountancy Europe responds to IAASB’s consultation on audit evidence

The IAASB issued a public consultation on proposed changes to the International Standard on Auditing (ISA) 500, Audit Evidence. 

We believe that the project has not fully achieved its public interest objectives, particularly regarding technology.  

Our comment letter calls for clarification on the expected changes from auditors in practice and notes the risk of over-documentation due to extensive application material. 

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IESBA releases PIE definition database

The International Ethics Standards Board for Accountants (IESBA) has developed the database of Public Interest Entity (PIE) definitions by jurisdictions as a resource to assist regulators, national standard setters, and other relevant bodies in developing or revising their definitions of PIE at the local level based on the IESBA’s PIE definition. It covers 78 jurisdictions in the Americas, Europe, Africa, Asia and Oceania. 

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Accountancy Europe responds to IESBA’s consultation on tax planning and ethics

The IESBA proposed two new sections to its Code of Ethics addressing tax planning and related services. 

We believe the proposals strengthen the ethical expectations for professional accountants in business and public practice when performing tax planning activities for employing organisations or providing tax planning services to clients, respectively. 

Our response provides constructive recommendations on how to clarify some of the requirements proposed. 

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FRC launches conversation starters to encourage investor-audit committee engagement

The UK Financial Reporting Council (FRC) has launched a new web page providing conversation starters aimed at promoting better engagement between investors and audit committees. This should help promote investors’ deeper understanding of companies and their approach to financial reporting and internal control, ultimately leading to greater transparency and investor confidence.  

The first in a series of conversation starters are aimed at investors wishing to engage with audit committees and companies on assurance-related topics. 

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