The Committee of European Auditing Oversight Bodies (CEAOB) has recently adopted critical new guidelines for limited assurance in sustainability reporting.
These non-binding guidelines offer auditors a framework for verifying sustainability information against the ESRS. The guidance covers key areas such as material misstatements, risk identification, and assessing disclosures under the double materiality principle.
Auditors shall obtain Limited Assurance that reported information is free from misstatements.
Misstatements can be:
- quantitative or qualitative
- arise from mistake or fraud
Not all misstatements can be recalled as material.
Focus areas of Limited Assurance:
Processes carried out and described by the entity - their relevance and accuracy to ESRS standards.
Systems of internal control relevant to Sustainability Statement preparation
Inconsistencies between the reported information and the ESRS or the EU Taxonomy requirements
Provided information on the existing policies, targets, action plans and metrics which gives foundation to described IRO`s.
Value chain information: systems to obtain and report VC information, data collected from actors in the value chain and their reliability.
Analysis of risk assessment practices.
❗ For the first year of Limited Assurance auditors may choose to perform identification of disclosures where material misstatements are likely to arise.