29th August 2023
The International Auditing and Assurance Standards Board (IAASB) has introduced fresh guidelines concerning the assurance of sustainability reports. These guidelines are labelled as the International Standard on Sustainability Assurance (ISSA) 5000 and outline the fundamental prerequisites for engagements related to assuring sustainability matters. This standard is intended to encompass a wide spectrum of assurance professionals worldwide.
The IAASB operates independently and is responsible for establishing standards that pertain to auditing, assurance, and the management of quality.
Why this matters
The ISSA 5000 is designed to function as an all-inclusive and independent standard applicable to a wide array of sustainability assurance assignments. The proposal responds to the recommendations put forward by the International Organization of Securities Commissions (IOSCO) and assigns to the efforts of other standard-setting bodies, such as the International Ethics Standards Board for Accountants (IESBA). The standards were developed to fit any sustainability information, regardless of the reporting framework, including both existing and upcoming ones. The considered reporting frameworks include those from the European Union, the International Sustainability Standards Board (ISSB), the Global Reporting Initiative, the International Organization for Standardization, and others.
This Standard will also serve as a means to offer further guidance on particular aspects of sustainability engagement, which the IAASB has pledged to address in its ongoing endeavours. The neutral stance it takes could facilitate adoption, especially as different regions mull over the necessity of professional accountants for providing assurance
In essence, while the IAASB’s primary focus is on auditing and assurance standards, its efforts in the realm of sustainability assurance can indirectly influence how banks approach and disclose their sustainability initiatives. By providing a framework for credible and reliable assurance of sustainability information, the IAASB contributes to the overall improvement of sustainability reporting practices in the banking sector and beyond.
The IOSCO will evaluate the ultimate standard in a way similar to its review and subsequent endorsement of the recent sustainability and climate disclosure standards introduced by ISSB. The assessment by IOSCO will gauge whether the standard possesses the necessary strength to facilitate assurance engagements that effectively cater to investors’ demand for dependable information. After this evaluation, IOSCO members will then consider the methods through which they could potentially integrate, implement, or draw insights from IAASB 5000.
The IAASB is calling on all stakeholders to comment on the proposed revisions via the IAASB website by the 1st of December 2023. Starting in September, the IAASB will host four roundtable discussions to engage stakeholders as well as take part in various virtual, regional, and national events throughout the consultation period to foster broader interaction.
The finalization and implementation of the standard are scheduled before the end of 2024. This timeline aims to enable its support for the initial reporting cycle under the new standards introduced by the ISSB.
Elena Pérez Celis,
Head of Policy & Public Affairs