Legal & Regulatory News

IAASB consults on new sustainability assurance standard

On 2 August, the International Auditing and Assurance Standards Board (IAASB) opened a consultation via the publication of an exposure draft on a ‘Proposed International Standard on Sustainability Assurance‘. The proposed standard is intended to be applied to third parties undertaking assurance reports on sustainability data. The consultation period is set to end on 1 December 2023.

The IAASB’s objective in creating the standard is to establish a comprehensive framework suitable for all forms of sustainability assurance engagements. The standard aims to improve confidence and reliability in ESG information by: -

• accounting for the entirety of the sustainability assurance process – with the practitioner considering information regarding both the acceptance and continuance of client relationships and engagement;
• applying to a broad range of sustainability topics;
• allowing interoperability between reporting frameworks, such as the International Financial Reporting Standards’ (IFRS) sustainability reporting standards - IFRS S1 and IFRS S2;
• outlining variation in assurance confidence through providing for both limited and responsible assurance engagements; and
• setting out how the assurance practitioner should approach the evaluation of a firm’s suitability criteria when presenting sustainability information.

The IAASB makes note of the fact that sustainability information may be susceptible to material misstatement as a result of fraud or error. As such, the IAASB requires assurance practitioners to establish procedures that allow for the identification of certain disclosures wherein material fraud or error may take place.

The IAASB recognises the variation in response that stakeholders may wish to share. As such, the board is developing an online survey as an alternate means of providing feedback – to be available August 2023.

Click here to read the press release.

Click here to read the exposure draft.

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