Challenges for Auditors in Relation to Disclosure of Sustainability Information in Financial Statements
Challenges for Auditors in Relation to Disclosure of Sustainability Information in Financial Statements

Author(s): Iavor Bachev
Subject(s): Politics / Political Sciences, Politics, Economy, Energy and Environmental Studies, Economic policy, EU-Accession / EU-DEvelopment, Accounting - Business Administration, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Sustainability; Sustainability standards; Auditor; Materiality
Summary/Abstract: In recent years, there have been global efforts to improve the role of sustainable development as a measure for controlling global warming. In June 2020, Regulation (EU) 2020/852 was published, which sets out six environmental objectives for businesses: climate change mitigation; the process of stabilizing the average global temperature below 2°C by 2050 and making efforts to limit it to 1.5°; adaptation to climate change; sustainable use and protection of water and marine resources; transition to a circular economy; pollution prevention and control; and biodiversity protection and restoration. The International Sustainability Standards Board (ISSB) was founded in November 2021, and its primary function is to produce sustainability disclosure standards. Two years later, the board agreed and adopted the first worldwide standards for sustainability disclosure, IFRS S1 and IFRS S2. On 5.01.2023, Directive (EU) 2022/2464 on corporate sustainability reporting entered into force, which allows users of information to identify environmental risks and opportunities that are material to enterprises. The paper seeks to identify areas of concern regarding the regulation and auditing of sustainability information. The following tasks are set: outline the requirements of Directive (EU) 2022/2464 and the changes it involves in the accounting directive; define the specifics of the standardization in the Republic of Bulgaria, as well as future auditor requirements.

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