CSRD Directive: publication of the guidelines on limited assurance on sustainability reporting drawn up by the CEAOB

After assessing the proposals submitted during the public consultation period, the Committee of European Auditing Oversight Bodies (CEAOB) has adopted the first limited assurance guidelines for the purpose of achieving a degree of harmonization in the assurance engagement on the sustainability information that must be reported by large public-interest companies from 2025 onwards.

As we announced in our publication last June, the draft guidelines prepared by the CEAOB underwent public consultation from June 21 until July 22, 2024. After the assessment of the proposals submitted (a total of 62, from 17 countries), the final text of the guidelines was adopted by the CEAOB on September 30.

Despite their non-binding nature, these guidelines are intended to serve the objective of harmonizing the limited assurance engagement regarding the sustainability information that large public-interest companies previously subject to the Non-financial Reporting Directive must begin to report in 2025 until the European Commission adopts, by delegated act, European limited assurance standards, the deadline for which is October 1, 2026.

Without being exhaustive, these guidelines only attempt to cover aspects considered essential that are not provided for in the Directive and in the Audit Regulation, whose provisions they consider to be applicable, for example, in relation to ethical and independence requirements, which they consider must also be met by assurance services providers; nor do they replace the national provisions that may be applicable to the assurance engagement in each case, which must be interpreted together.

Based on these premises, they address some of the procedures that must be conducted by practitioners for the purpose of achieving the limited assurance objective, i.e., to draw conclusions as to whether the sustainability information reported is free from quantitative or qualitative misstatements that could be material for users. Thus, they contain general guidelines regarding the procedures that must be conducted in order to understand the operation of the entity, its environment and its internal control system in relation to sustainability information, emphasizing especially the need to understand the systems implemented by the entity to determine the information that it must report under the double materiality principle or the activities that must be considered eligible in accordance with article 8 of the Taxonomy Regulation, and to collect information from its value chain and ensure its reliability.

The guidelines also establish certain general outlines, among other aspects, regarding forward-looking information that the entity may provide, communication between practitioners and auditors or other professionals, the use of third-party experts to carry out the assurance engagement, or the format and content of assurance reports.

By the coordinated adoption of these guidelines by the different national supervisory bodies that form part of the CEAOB, it is ultimately intended to contribute to the harmonization of the limited assurance on sustainability reporting that must be undertaken before the Commission approves the European assurance standards.