Review this news item for a list of other changes made to the work plan since it was last revised.

SSARS 25 (1) contains an explicit requirement related to determining materiality, (2) allows for the expression of an adverse review conclusion when financial statements are materially and pervasively misstated, and (3) requires a statement regarding independence in the accountant’s review report. In addition, the SSARS converges AR-C Section 90, “Review of Financial Statements,” with International Standard for Review Engagements 2400 (revised), Engagements to Review Historical Financial Statements.

Review the SSARS and At a glance overview on the AICPA’s website.

The study assessed how 1000 European companies disclose sustainability and other non-financial information. Key findings of the study were:

1. Less than 22% of the companies surveyed report climate-related key performance indicators in summarised statements, the rest of them publish them scattered around in different locations or not at all;
2. only 20%-25% of companies describe risks specifically even though identifying them as relevant to the company in the first place;
3. the TCFD criteria are not applied;
4. outcomes are only reported in 4% of cases despite that fact that risks are identified and in some cases activities described;
5. supply chain transparency is low with supply chain transparency in the apparel sector being the highest but still not exceeding 14%;
6. only 6% of companies provide economic figures on sustainability activities;
7. disclosures are immaterial.

There is not a major difference between different European regions, with the exception that companies from former Eastern Europe lag behind.

Generally, disclosures are not specific enough to enable understanding of a company’s position and future developments. Reports focus on presenting general policies and commitments, but not concrete targets, outcomes of policies with respect to these targets, and specific information on risks and impacts.

The following additional information is available on the Alliance for Corporate Transparency website:

• Press release
• Final report
• Database with full analyses and findings
• Full summary on our global website

The statement includes eight actions which accountants are called upon to take in response to the climate emergency. It also includes commitments from the bodies themselves in support of their members. The call to action highlights that climate change represents an economic, social and business risk – a risk that accountants from across the world must take action on.

Review the call to action on the A4S's website.

As reported earlier, Executive Vice President Valdis Dombrovskis of the EC announced in January 2020 that later this year he would present a renewed sustainable finance strategy, which would include a revision of the Non-Financial Reporting Directive (NFRD).

As a first step of the corresponding initiative that has just been launched, an "Inception impact assessment" has been published. The background paper for the impact assessment notes the following current problems with the NFRD:

• Reported non-financial information is not sufficiently comparable or reliable.
• The reported non-financial information does not meet users' needs.
• Companies incur unnecessary and avoidable costs related to reporting non-financial information.
• Companies face uncertainty and complexity when deciding what non-financial information to report, and how and where to report such information.

The background papers names three options that could be followed to address these problems:

1. Continue the current approach of non-binding guidelines to assist companies when reporting according to the NFRD.
2. Explore the use of standards (which would remain voluntary for companies to use if they wish to).
3. Revise and strengthen the provisions of the NFRD.

Given Mr Dombrovskis earlier remarks and the title of the initiative, it seems that the EC has already formed an opinion on the best way forward. However, stakeholders have the possibility to comment on the impact assessment (until February 27, 2020), and a formal full consultation is announced for the first quarter of 2020.

Review the consultation page on the EC website that offers access to the Inception impact assessment background paper, the feedback possibility and a general outline on the planned timing for the revision.

As reported earlier, Executive Vice President Valdis Dombrovskis of the EC announced in January 2020 that later this year he would present a renewed sustainable finance strategy, which would include a revision of the Non-Financial Reporting Directive (NFRD). The initiative to update the NFRD was launched earlier this month. Today, the EC launched the consultation itself by publishing a consultation document. 

In the introduction to the consultation, the EC makes the following statement:

1. There is inadequate publicly available information on non-financial issues as:
   • a) reported non-financial information is not sufficiently comparable or reliable;
   • b) companies do not report all non-financial information that users think is necessary, and many companies report information that users do not think is relevant;
   • c) some companies do not report such information; and
   • d) it is hard to find non-financial information even when it is reported.
2. Companies incur unnecessary and avoidable costs related to reporting non-financial information.

The consultation document itself contains 45 questions in eight categories:

1. Quality and scope of non-financial information to be disclosed
2. Standardisation
3. Application of the principle of materiality
4. Assurance
5. Digitisation
6. Structure and location of non-financial information
7. Personal scope (which companies should disclose)
8. Simplification and reduction of administrative burdens for companies

"Standardisation" contains questions about whether there should be common standards for EU companies, what the relation between financial information and non-financial information should be and which bodies/groups should be involved in setting these standards (if that should be the case).

The consultation document is available on the EC website (login required). Feedback is requested by May 14, 2020.

The report provides an analysis of the current state of climate-related reporting of approximately 150 European companies and focuses on “identifying good reporting practices and assessing the level of maturity in the implementation of the TCFD recommendations, while also taking into consideration the climate-related reporting elements of the NFRD and the related non-binding Guidelines on non-financial reporting and Guidelines on reporting climate-related information.” In additional, the European Lab Project Task Force has issued two supplement documents which complement the report with detailed findings and in-depth review of scenario analysis reporting.

Review the press release on the EFRAG’s Web site as well as this page offering access to the three documents.

The webinar summarizes main proposals in the exposure draft, including subtotals in the statement of profit and loss, disaggregating information, and management performance measures.

Review the press release on the Board’s website.

The podcast discusses the amend­ments ten­ta­tively finalized during the meeting and focuses on credit card contracts, risk mitigation option, contracts acquired in a settlement period, and acquisition cash flows.

View the podcast on the IASB's website.

The IIRC has identified key themes around which it invites feedback, outlined in three topic papers on a) business model considerations, b) responsibility for an integrated report, and c) charting a path forward. The first two topic papers relate to the current <IR> Framework revision process. The third topic paper forges ahead with themes shaping the future of corporate reporting, including extended assurance and the role of technology. Feedback on this paper will inform the IIRC’s longer-term strategy.

Each topic paper separately invites market feedback via an online survey. Responses are requested by March 20, 2020. Please see the following additional information on the IIRC website:

• Press release
• Access to the three topic papers and surveys

Proposed amendments to the Framework will receive 90-day public exposure via a consultation draft, launching in May 2020. The revised Framework is due for release at the end of 2020.