Tom Seidenstein, Chair of the International Auditing and Assurance Standards Board (IAASB), has called on policymakers and practitioners to adopt the ‘ISSA 5000’ standard as the global baseline for auditing corporate sustainability reporting, at a webinar organised on Tuesday 12 November by representatives of European and international accountants, Accountancy Europe and IFAC.
Having been implemented in 2024 for the publication of sustainability reports in accordance with ‘ESRS’ standards (see EUROPE 13464/22), the ‘CSRD’ directive on corporate sustainability reporting also includes an ‘audit’ component. The EU will base its auditing standards on those of the IAASB, which have just been drawn up (see EUROPE 13473/4).
“We are pleased that the European Commission has asked the Committee of European Auditing Oversight Bodies (CEOB) to advise the Commission on how to incorporate the ‘ISSA 5000’ standard CSRD-related requirements”, he noted. “This commitment to a global baseline will serve as a catalyst for other jurisdictions to use ‘ISSA 5000’ as well”, he added.
Mr Seidenstein explained that the IAASB has focused on the work involved in an entity’s materiality process and has paid particular attention to scalability and proportionality throughout the process. The IAASB has built on existing practices already embedded in well-established and widely used auditing standards.
“It is extremely important that the performance of the audit engagement is underpinned by robust quality management standards and relevant ethical requirements”, emphasised Willie Botha, Program & Technical Director at the IAASB. “So we have clarified in the standard that the engagement partner needs to be a member of a firm that deploys ISQ1 and on the ethics side that the practitioner has to comply with relevant ethical requirements comprising the IESBA code”, he added.
David Madon, IFAC’s Director of Sustainability, Policy & Regulatory Affairs, highlighted the paradigm shift in sustainability reporting. “The switch from voluntary to mandatory is an important transition”, he said. According to him, “there is both an opportunity and a challenge to develop high-quality sustainability information”. (Original version in French by Anne Damiani)