October 22, 2018
By: Vita Ramanauskaite, Advisor, Accountancy Europe
People need reliable corporate information to decide if they will invest, buy products or sign an employment contract. Non-financial corporate information (NFI) is essential to get the full picture of a company’s performance, which financial information alone cannot provide anymore.
Independent assurance enhances the quality and reliability of the NFI that companies report. Professional accountants have experience in providing independent assurance, and they abide by standards on quality and ethics. Via reporting and assurance, they help build a financial system that supports sustainable economies. They support companies shifting their focus to long-term horizons and help emphasize value creation for the business and its key stakeholders.
Current NFI Assurance Practice: Highly Dispersed
Currently, NFI is not subject to the same level of assurance as audited financial information. Additionally, independent assurance on NFI is not mandatory in most countries around the world and in Accountancy Europe members’ jurisdictions. Professional accountants approach NFI assurance engagements in different ways not only across jurisdictions but also across firms due to different levels of maturity in NFI reporting within companies.
Sharing Best Practices to Strengthen NFI Assurance
Since sharing best practices can help strengthen NFI assurance, Accountancy Europe has:
– examined the key steps for NFI assurance and requested feedback on responding to assurance needs for NFI;
– asked experts about the practical challenges of NFI assurance via a workshop with the World Business Council for Sustainable Development;
– analyzed all expert feedback, focusing on suggestions to strengthen NFI assurance practices: Responding to Assurance Needs on Non-financial Information.
What Do the Experts Say?
As detailed in the report, assurance practitioners indicated their practical experience, current challenges and possible solutions for each of the six key steps toward NFI assurance that we previously identified.
- Maturity of the company’s reporting processes
- Define the scope of the assurance engagement
- Assess the subject matter
- Assess the reporting criteria
- Assess materiality
- Form of the assurance report
With this expert feedback, Accountancy Europe aims to streamline NFI assurance practices and stimulate a stakeholder dialogue on technical matters, especially with the International Audit and Assurance Standards Board.
The IAASB is currently developing non-authoritative guidance to address key challenges in assurance engagements on emerging forms of external reporting. IAASB and Accountancy Europe are holding an event in Brussels on November 8, 2018 to help shape the future of assurance for these emerging forms of reporting, and invite you to join us.