Eumedion: assurance report on sustainability information should include key assurance matters
News ยท 01-12-2023
An assurance report on sustainability should include should include ‘Key Assurance Matters’, similar to the requirement that an audit report includes ‘Key Audit Matters’. Inclusion of Key Assurance Matters will increase the information value of the assurance report for users, such as investors, employees and non-governmental organisations (NGOs). Eumedion advocates this in its response to the International Audit and Assurance Standards Board (IAASB) proposal for an international standard on sustainability assurance.
Eumedion further remarks that audit and assurance standards need to safeguard that the assurance on sustainability reporting and the audit of financial reporting are not conducted in isolation. Auditors should consider insights gained during their work on a company’s sustainability reporting in their financial audit, and vice versa. For example, key assumptions related to net zero commitments, need to be consistent throughout a company’s annual report.
Eumedion’s response also warns against dilution of the terms ‘limited assurance’ and ‘reasonable assurance’ when applied to sustainability reporting. The question is raised whether additional levels of assurance are needed to better convey to stakeholders what assurance entails, irrespective of which report it concerns.
Eumedion is a proponent of defining ‘fraud’ to explicitly include corruption in audit and assurance standards. Such elevation would be beneficial for the rigour with which assurance is conducted and elevates corruption from a event of ‘non-compliance with laws and regulations’ to fraud.