Assurance on the integrated report is a hot topic internationally. The International Auditing and Assurance Standards Board (IAASB) is currently looking at the issue.
IAASB’s EER Assurance Project
A Project Advisory Panel was established in March 2018 to support the work of the Task Force for this project. South Africa is represented on this Panel by Ciara Reintjes from the IRBA.
The key objective of the project is to enable more consistent and appropriate application of ISAE 3000 (Revised) to emerging forms of external reporting (EER) and greater trust in the resulting assurance reports by users of EER. This will be achieved primarily through:
- Developing non-authoritative guidance in applying ISAE 3000 (Revised) to EER;
- Continuing to provide thought leadership on assurance issues in relation to EER; and
- Coordinating the work of the project with related initiatives of other relevant international organizations.
The project proposal can be found here.
Phase 1 of the project has been completed, and the IAASB has issued “Extended External Reporting (EER) Assurance – IAASB Consultation Paper (February 2019)”. This Consultation Paper is open for comment until 21 June 2019. It contains the following proposed content:
|Chapter||Content||Status of development|
|1||Introduction||Included in the Consultation Paper|
|2||Overview of an EER Assurance Engagement||Included in the Consultation Paper|
|3||Determining Preconditions and Agreeing the Scope||Guidance relating to the preconditions has been drafted in phase 1. ‘Agreeing the Scope’ is allocated to phase 2, although some initial guidance has been developed.|
|4||Applying Appropriate Skills||Not developed – allocated to phase 2.|
|5||Exercising Professional Skepticism and Professional Judgment||Not developed – allocated to phase 2.|
|6||Considering the System of Internal Control||Included in the Consultation Paper|
|7||Determining the Suitability of Criteria||Included in the Consultation Paper|
|8||Considering the Entity’s ‘Materiality Process’||Included in the Consultation Paper|
|9||Performing Procedures and Using Assertions||Guidance on using assertions is developed. Guidance on performance materiality is to be developed in phase 2.|
|10||Assuring Narrative Information||Chapter is only partially developed as guidance relating to ‘obtaining evidence’ is allocated to phase 2.|
|11||Assuring Future-Oriented Information||Chapter is only partially developed as guidance relating to ‘obtaining evidence’ is allocated to phase 2.|
|12||Considering the Materiality of Misstatements||Included in the Consultation Paper|
|13||Preparing the Assurance Report||Not developed – allocated to phase 2.|
Phase 2 content (as mentioned above) will be included in an exposure draft of the guidance, together with the phase 1 guidance (that will already have been commented on), to be issued in early 2020. The final guidance is expected to be issued in late 2020.
The Challenges of Assuring Integrated Reports: Views from the South African Auditing Community
A publication from ACCA , dated October 2015.
Assuring the integrated report: Insights and Recommendations from Assumers and Preparers
This academic paper by Warren Maroun, University of Witwatersrand, appears in the British Accounting Review. It’s available, at a fee, from sciencedirect.com
IAASB Discussion Paper 2016
This Discussion Paper, Supporting Credibility and Trust in Emerging Forms of External Reporting, released in August 2016 was open for public comment until 3 February 2017. It covers the assurance of integrated reports.
The Discussion Paper’s supplementary documents:
- EER Bodies
- IFAQ FAQs: Discussion Paper, Supporting Credibility and Trust in Emerging Forms of External Reporting
- Integrated Reporting Working Group: Supplemental Information to the Discussion Paper, Supporting Credibility and Trust in Emerging Forms of External Reporting: Ten Key Challenges for Assurance Engagements
- At a glance
The IAASB will in due course be uploading the public comments received on the Paper on its website and analysing the responses. They will be available at IAASB IRWG – Integrated Project.
IIRC’s call for action 2014 and 2015
The International Integrated Reporting Council (IIRC) started the international debate as the ‘next step’ after the release of the International <IR> Framework. In July 2014 it released two Papers which were open for public comment, Assurance on <IR>: an introduction to the discussion and Assurance on <IR>: an exploration of issues. In July 2015 it released the Overview of feedback and call to action which summarised the significant matters in the debate and stressed the continued need to strengthen the overall credibility and trust in integrated reporting.