INTHEBLACK May 2025 - Magazine - Page 42
P O D C AS T
WITH INTEREST PODCAST
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The With Interest podcast features economic updates and developments
for the business world. Here are some highlights from a recent episode.
to the podcast
IESBA’S AMENDMENTS: WHAT FINANCE
PROFESSIONALS NEED TO KNOW
It is vital to be across amendments made by the International Ethics Standards
Board for Accountants (IESBA). Mark Babington, a member of IESBA
and an executive director of regulatory standards at the Financial Reporting
Council, shares insights into the new amended International Ethics Standards
for Sustainability Assurance (IESSA) and its global implications.
THE “HOLY TRINITY”
“You’ve got the reporting standards. So for
many jurisdictions, the focus is on International
Sustainability Standards Board reporting
standards because they bounced out of COP26.
“Reported information needs to be assured,
so you’ve got a global assurance standard
issued by the International Auditing and
Assurance Standards Board. That requires
ethics and independence standards, mainly
to underpin confidence in the trustworthiness
of that information and the fact that it has
been properly prepared and properly assured.
“With that in mind, IESSA was asked by the
International Organization of Securities
Commissions to look to develop a new part
of the code, which would be tailored to dealing
with sustainability assurance engagements.
Effectively, what it does is leverage the
approach in the code. It sets a high standard
of independence and ethics based on an audit
of financial statements. But it reflects the fact
that there are slightly different things about
a sustainability assurance engagement.”
GLOBAL ADOPTION
“I think there’s a lot of work for us now
to make sure that those countries that already
use the code to support audit and other
assurance work also use the IESSA to support
sustainability assurance engagements. It’s a
bit difficult to say how it works globally
42 INTHEBLACK May 2025
MARK BABINGTON,
FINANCIAL REPORTING COUNCIL
at the moment, because you’re in quite
a fortunate position here. Australia is a bit
of a frontrunner. Government has set
legislation which has provided a clear
framework for sustainability reporting and its
assurance. [Australia has] got clarity over
who’s going to report and when, and what’s
going to be assured and the level of assurance.
A lot of other jurisdictions are behind you.
“I think what we’re doing is really raising
awareness of the IESSA as a tool to help
high-quality reporting and assurance. We are
already getting a lot of interest from different
jurisdictions.”
ADVICE FOR AUDITORS
“My starting point would be to look at
the things that you’re not familiar with
as an auditor and make sure that you
understand those, but remember not
to overcomplicate things. Sometimes people
talk about the value chain and they say,
‘Well, my client’s a big company. They’ve got
thousands of entities in their value chain.
What do I do?’
“Well, remember that many reporting
frameworks only require you to focus on
material components in the value chain. So you
might have 2000, but only 20 of them might
be material. Ask those difficult questions and
play with the IESSA to see how it would work in
some of the scenarios that are familiar to you.”
LISTEN
to the full
podcast episode
