Prof Dr Michel De Wolf
For several years, the main developments in auditing, reporting and compliance are (or were?) related to environmental, social and governance issues, notably under the appealing vocabulary of “sustainability information”.
Around the world, the European Union was likely the most notable promotor of this new kind of reporting, with several directives, culminating with the famous CSRD (Corporate Sustainability Reporting Directive) and specific standards, the so-called ESRS (European Sustainability Reporting Standards).
But crashes are now occurring. The famous Draghi report, written by a former president of the European Central Bank, has questioned different aspects of such kind of regulation in view of the weakening competitiveness of Europe. And within the USA, the Trump administration is dismantling so many regulations… The EU could not continue as if nothing had happened. With more humour than his distant successor, Ronald Reagan denounced the actions of the authorities in Europe with such vision: "If something succeeds, you tax it; if it still moves, you
regulate it; and if it stops moving, you subsidize it."
The EU has therefore asked the European Commission to formulate proposals in order to alleviate and simplify the regulations. And it has already led to extended delays for implementing the CSRD. Its very content and the ESRS should also be revisited in the coming months. Most likely the scope of the directive will be reduced, the number of information to be disclosed will be diminished, the small and medium enterprises will be protected, and the assurance to be given by auditors will be permanently limited.
Surely the ambitions of the EU are not in line with the current concerns already mentioned, but also the trade tariffs war and the unavoidable defence efforts to be done by the old democracies.
But do not throw out the baby with the bathwater.
Environmental and human security is of the utmost importance for the survival of well-being, like financial security has been and is considered. And the first step for getting security is transparency, with appropriate reporting and solid assurance.
This cannot be overruled.
Prof Dr Michel De WolfResponsible Editor & Global Chair of the GGI ARC PG
Disclaimer
The information provided in this newsletter came from reliable sources and was prepared from data assumed to be correct; however, prior to making it the basis of a decision, it must be verified. Ratings and assessments reflect the personal opinion of the respective author only. We neither accept liability for, nor are we able to guarantee, the content. This publication is for GGI internal use only and intended solely and exclusively for GGI members.
DGST Réviseurs d’entreprises promises its clients to deliver accurate, independent and effective advice. The core business of their audit services is statutory audits and assurance engagements. For DGST, auditing is not just about checking figures, but involves risk anticipation and enhanced risk awareness.
GGI member firmDGST Réviseurs d’entreprisesBrussels, Namur, Verviers, BelgiumT: +32 2 660 63 43
Advisory, Auditing & Accounting, Corporate Finance, Tax
Prof Dr Michel De Wolf is an auditor, lawyer and honorary chairman of the Belgian Institute of Auditors. He specialises in high-level tax advice, financial analysis, IAS/IFRS, company law and consolidation. He has proven experience as an auditor and advisor, particularly in various non-profit organisations and public-sector entities. Prof Dr De Wolf is current chairman of CBCR/BOBR, the umbrella organisation for audit SMPs in Belgium. He is also a member of the accounting standard setter in Belgium, and a part-time judge. He is honorary dean of the Louvain School of Management. Contact Michel.
