Context

This standard addresses the requirements of Article 26a (3) of the Audit Directive. It must be complied with for limited assurance engagements on sustainability reporting required by Article 34 (1) (aa) of the Accounting Directive. The standard applies in addition to, but does not override, any legal provisions applicable in the context of the engagement. Practitioners are required to comply with laws and regulations regarding ethics and quality management, which are not explicitly covered within this document.

Introduction

The standard deals with limited assurance engagements on sustainability information. Sustainability information results from measuring or evaluating sustainability matters against criteria. The ESRS require a process by which the entity identifies sustainability matters to be reported, including the application of double materiality. Criteria embodied in law or regulation are presumed to be suitable for the engagement circumstances.

Scope of this standard

The scope of the assurance engagement extends to all sustainability information to be reported by the entity as required by Article 34 (1) (aa) of the Accounting Directive. The practitioner is required to identify or describe the information subject to the assurance engagement in their reporting.

Effective date

This standard is effective for assurance engagements on sustainability information reported for periods beginning on or after 15 December 2027. Earlier application of the standard is permitted.

Objectives

The objectives of the practitioner are to obtain limited assurance about whether the sustainability information is free from material misstatement. They must express a conclusion through a written report that describes the basis for that conclusion and communicate further as required by the standard. If limited assurance cannot be obtained and a qualified conclusion is insufficient, the practitioner must disclaim a conclusion or withdraw from the engagement where legally possible.

Definitions

The standard introduces specific definitions, including an accredited independent third party, which refers to a person or firm issuing a report required by European legislation on certain sustainability elements. Joint assurance is defined as an engagement where more than one practitioner is appointed to perform the assurance engagement jointly. Materially misstated is used when information is not free from material misstatements, including omissions.

Conduct of an assurance engagement in accordance with this standard

The practitioner must comply with this standard and applicable laws and regulations. They shall not represent compliance with the standard unless they have complied with all relevant requirements. A proper understanding of the entire text of the standard, including its application and explanatory material, is necessary to apply requirements properly.

Communication with the statutory auditor(s)

The practitioner must communicate with the statutory auditors of the entity at appropriate points during the engagement and before signing the limited assurance report. The aim is to inform the statutory auditor about identified risks and misstatements regarding matters of connectivity between financial statements and sustainability statements. Communication should ensure the consistency of information provided in sustainability statements with relevant matters disclosed in financial statements.

Documentation

Practitioners must prepare engagement documentation on a timely basis to provide a record of the basis for the assurance report. This documentation must be sufficient for an experienced practitioner with no previous connection to the engagement to understand the nature, timing, and extent of procedures performed. The assembly of the final engagement file must be completed and closed no later than 60 days after the date of the assurance report.

Preconditions for an assurance engagement

The practitioner must obtain preliminary knowledge of the engagement circumstances, including the sustainability information to be reported. They must evaluate whether management has a reasonable basis for the sustainability information and consider whether the entity has a process to identify the information to be reported.

Materiality

When the applicable criteria require the entity to apply both financial materiality and impact materiality, the practitioner must take both perspectives into account. Performance materiality must be determined for quantitative disclosures to reduce aggregation risk to an appropriately low level.

Procedures on sustainability information in European single electronic format

Specific procedures are required for sustainability statements prepared in the European Single Electronic Format (ESEF). The practitioner must plan procedures considering ESEF characteristics and deadlines. They must ensure the statement is prepared in the required electronic reporting format and perform procedures to obtain sufficient appropriate evidence that marking up requirements have been complied with. This includes assessing risks related to machine readability and inappropriate tagging.

Preparing the assurance report

The assurance report must be in writing and contain a clear expression of the limited assurance conclusion. It must include a title indicating it is an independent practitioner’s limited assurance report, an addressee, and a conclusion section. The conclusion must specifically state whether anything has come to the practitioner’s attention to cause them to believe the information is not fairly presented in accordance with the ESRS, the Taxonomy Regulation, and the ESEF Regulation.

Appendix 1 ADD

This appendix covers additional specific requirements for joint assurance situations. Each practitioner must be in a position to form their own conclusion based on their performed procedures and reviews. They must determine a general approach together and ensure a balanced distribution of work based on quantitative and qualitative aspects. A “cross review” is required where each joint practitioner critically reviews the work of the others to ensure conclusions are relevant and consistent.