FRC: Proposed International Standard on Sustainability Assurance (ISSA) (UK) 5000 General Requirements for Sustainability Assurance Engagement – Invitation to comment

On 29 May 2025, the Financial Reporting Council (FRC) published a consultation paper on a proposed UK version of the International Standard on Sustainability Assurance (ISSA) 5000, “General Requirements for Sustainability Assurance Engagements” (Consultation).

The Consultation follows the publication in November 2024 of ISSA 5000. This was published by the International Auditing and Assurance Standard Board (IAASB) and contains requirements and application material specific to assurance engagements on sustainability information. It applies to sustainability information reported across any sustainability matter and prepared under multiple frameworks, including the IFRS Sustainability Disclosure Standards S1 and S2. 

The FRC proposes to issue a UK version of the standard, ISSA (UK) 5000, for use on a voluntary basis by UK assurance providers, in the hope that this will lead to the performance of consistent, quality sustainability assurance engagements across the UK market as well as contributing to greater international alignment of sustainability assurance engagements. The relevant ethical requirements for the UK standard will be the provisions of the International Ethics Standards Board for Accountants (IESBA) Code related to sustainability assurance engagements. 

A draft of ISSA (UK) 5000 has been published for comment. Only one modification to ISSA 5000 is proposed in ISSA (UK) 5000.  ISSA (UK) 5000 will include a safeguard that prohibits the use of direct assistance by internal auditors in sustainability assurance engagements. This is consistent with an existing prohibition for audits of financial statements in the UK.

The FRC are proposing an effective date for assurance engagements on sustainability information reported for periods beginning on or after 15 December 2026, or as at a specific date on or after December 15, 2026. Earlier application would be permitted. This is in line with the effective dates applied by both the IAASB and the IESBA.

The FRC is requesting comments on the Consultation by 31 July 2025.

(FRC, Proposed International Standard on Sustainability Assurance (ISSA) (UK) 5000 General Requirements for Sustainability Assurance Engagement – Invitation to comment, 29.05.2025)

FRC: Amendments to FRS 101 Reduced Disclosure Framework – 2024/25 cycle

On 28 May 2025, the Financial Reporting Council (FRC) published the results of its annual review of amendments to IFRS Accounting Standards to decide whether FRS 101 Reduced Disclosure Framework should provide exemptions from new disclosure requirements or whether other consequential amendments are required. These amendments are the outcome of the 2024/25 annual review of FRS 101, which addressed amendments issued in the year to 31 August 2024.

FRS 101 Reduced Disclosure Framework sets out an optional reduced disclosure framework that is available for the individual financial statements of subsidiaries and ultimate parents that otherwise apply the recognition, measurement and disclosure requirements of adopted IFRS. The standard is intended to enable cost effective financial reporting within groups to reduce reporting burdens, particularly for those applying IFRS Accounting Standards in their consolidated financial statements.

The FRC consulted on proposed amendments to FRS 101 in December 2024. The key amendments now being made are as follows:

• Taking account of IFRS 18 Presentation and Disclosure in Financial Statements: This is a new standard that replaces IAS 1 Presentation of Financial Statements for annual reporting periods beginning on or after 1 January 2027. The amendments mean that FRS 101 will continue to require a similar level of disclosure both before and after the introduction of IFRS 18. However, a relatively large volume of amendments to FRS 101 are necessary to replace references to IAS 1 with references to IFRS 18, and new exemptions are provided from some new requirements in IFRS 18, including those that require disclosure in relation to management-defined performance measures. (v) 
• Taking account of IFRS 19 Subsidiaries without Public Accountability: Disclosures: IFRS 19 is a new type of IFRS Accounting Standard. This optional standard permits an eligible subsidiary to apply the recognition, measurement and presentation requirements in IFRS Accounting Standards, along with a reduced set of disclosure requirements. The objective of IFRS 19 is similar to that of FRS 101, but the IASB’s approach to its development was different to the FRC’s approach and there are significant differences between the two. The FRC states that it would not make sense for a qualifying entity to apply both IFRS 19 and FRS 101; so amendments are being made to FRS 101 that will prevent this from occurring. Subject to the endorsement of IFRS 19, two different reduced disclosure standards would be available in the UK and/or Republic of Ireland.

The FRC has published a short “Explainer” in relation to the amendments, together with a document setting out the amendments.

(FRC, FRC concludes annual review of FRS 101, 28.05.2025)