Assurance on the integrated report is a hot topic internationally. The International Auditing and Assurance Standards Board (IAASB) has looked at the issue and has issued Guidance for use by accountants and non-accountants (see Assurance guidance below). Their Guidance covers the broad area of Extended External Reporting (EER). EER addresses many different forms of reporting: integrated reporting, sustainability reporting, non-financial reporting on environmental, social and governance matters, and more.
IFAC and IIRC push for assurance
The two international bodies support the acceleration of integrated reporting assurance in a thought leadership paper released in February 2021. The easy-to-read document explains the status quo, the difference between reasonable and limited assurance, and sets out the way forward. To view the paper, click here.
The standard to use, for 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.
Further, 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 says 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: