The Australian Securities and Investments Commission (ASIC) has published responses to frequently asked questions (FAQs) clarifying the review and audit requirements for sustainability reports under the Corporations Act 2001.
The guidance is aimed at both auditors and preparers of sustainability reports. For auditors, the FAQs outline obligations such as forming an opinion on the sustainability report, the content of the auditor’s report, and the extent to which modified liability settings apply. For preparers, the document sets out responsibilities regarding the appointment, removal or resignation of auditors, as well as the processes for obtaining a review or audit.
ASIC said it would take a “pragmatic and proportionate” approach to supervision and enforcement while the requirements are phased in, stressing that enforcement investigations are more likely where misconduct is considered serious or reckless.
Under the legislation, reporting entities must have their sustainability reports reviewed or audited in accordance with the Corporations Act and the Australian Auditing and Assurance Standards Board’s (AUASB) ASSA 5000 General Requirements for Sustainability Assurance Engagements. An auditor’s report must also be obtained, as set out in sections 301A, 1707E and 1707F of the Corporations Act.
For financial years commencing before 1 July 2030, reports must be reviewed or audited to the extent required by AUASB standard ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports. From 1 July 2030, full audits of sustainability reports will become mandatory.
