ASIC has published responses to some frequently asked questions (FAQs) about the review and auditing requirements for sustainability reports under the Corporations Act 2001.

FAQs: Review or audit of sustainability reports may be helpful for:

• auditors in understanding their obligations under the Corporations Act, such as in relation to forming an opinion on the sustainability report, what the auditor’s report on the sustainability report must contain, and the extent to which the modified liability settings apply to statements in the auditor’s report on the sustainability report, and
• preparers of sustainability reports in understanding their obligations in relation to obtaining a review or audit of the sustainability report, the appointment, removal or resignation of auditors, and who can conduct a review or audit of the sustainability report.

ASIC will take a pragmatic and proportionate approach to supervision and enforcement as the review and auditing requirements for sustainability reports under the Corporations Act are being phased in. We are more likely to commence an enforcement investigation where we see misconduct of a serious or reckless nature.

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FAQs: Review or audit of sustainability reports

Background

Entities that are required to prepare a sustainability report (reporting entities) must:

• have the sustainability report reviewed or audited in accordance with the Corporations Act and ASSA 5000 General Requirements for Sustainability Assurance Engagements (ASSA 5000), and
• obtain an auditor’s report on the sustainability report: see s301A, s1707E and s1707F of the Corporations Act.

ASSA 5000 has been made by the Australian Auditing and Assurance Standards Board (AUASB) under s336(1) of the Corporations Act.

For financial years commencing before 1 July 2030, the sustainability report must be reviewed or audited to the extent required by the AUASB: see s1707E(1)–(2) of the Corporations Act and ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001 (ASSA 5010).

From 1 July 2030, the sustainability report will be required to be audited: see s301A of the Corporations Act.