Assurance on sustainability reporting and the integrated report is rising in importance internationally. For the past few years, the International Auditing and Assurance Standards Board (IAASB) has looked at the topic and has issued a series of exposure drafts and standards. Below is a little history of developments over the past few years. Important to know is that the IAASB is set to release its new ISSA 5000 Exposure Draft around September 2023 for public comment, with the final standard expected in December 2024. This will apply to both sustainability reporting and the integrated report.
The current standard to use, for both accountants and non-accountants, is the International Auditing and Assurance Standards Board’s (IAASB) International Standard of Assurance Engagements (ISAE) 3000 (Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial Information released in 2013.
On 6 April 2021, the IAASB issued the Non-Authoritative Guidance on Applying ISAE 3000 (Revised) to Extended External Reporting (EER) Assurance Engagements. The IAASB said the guidance promotes consistent high-quality application of ISAE 3000 (Revised) in extended external reporting assurance engagements. Per the IAASB, extended external reporting encapsulates many different forms of reporting, including but not limited to, sustainability or environmental, social and governance (ESG) reporting, integrated reporting, reporting on corporate social responsibility, greenhouse gas statements, and service performance reporting in the public sector. These kinds of extended reporting are growing in frequency and importance, and address matters that are becoming increasingly critical to decision-making by investors and other users.
The Guidance addresses a number of overarching matters, including: applying appropriate competence and capabilities, exercising professional skepticism and professional judgement, and the preconditions for an assurance engagement, as well as more specific technical matters. The Guidance also provides further explanation and examples to better understand the distinction between limited assurance and reasonable assurance engagements.
The IAASB also issued two additional items of non-authoritative support material. The IAASB says they are not integral to the Guidance and that the Guidance can be used without them, but are available as additional resources for practitioners: (1) Credibility and Trust Model Relating to EER Reporting (2) Illustrative Examples of Selected Aspects of EER Assurance Engagements (includes examples that cover a broad range of reporting frameworks). Available on the IAASB website.
The Guidance was the focus of an extensive IAASB EER Assurance Project looking at application that started in October 2017 and issued a series of papers open for public comment.
Related documents and links: