Clarity on sustainability assurance proposals needed to strengthen governance and investor confidence

CPA Australia has responded to the Auditing and Assurance Standards Board’s (AUASB) proposed amendments to the Australian Standard on Sustainability Assurance (ASSA 5010), which aim to clarify the mechanics of phased assurance regimes under the Corporations Act 2001.

The proposals cover two key areas:

1. Clarifying that the directors’ declaration is to be assured in Years 2 and 3, even where directors make the declaration on a “reasonable steps” basis.
2. Pre-empting legislation currently before Parliament that would extend limited liability provisions to voluntary reporting and assurance, including the proposed phasing for voluntary assurance.

CPA Australia’s position:

• Directors’ declaration assurance: CPA Australia supports including the directors’ declaration in assurance for Years 2 and 3 to enhance consistency, investor confidence, and governance accountability. However, it notes practical challenges in evidencing “reasonable steps” and strongly recommends AUASB develop clear, practical guidance to support consistent and proportionate application during the transitional phase.
• Voluntary reporting provisions: CPA Australia supports the proposed amendments on voluntary reporting in principle, provided the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 is enacted before 31 December 2025. It recommends deferring incorporation of voluntary reporting provisions into ASSA 5010 until legislative certainty is achieved.

CPA Australia is committed to supporting robust assurance standards that underpin trust in sustainability disclosures.

“High-quality sustainability reporting is critical for investor confidence and the public interest,” said Tiffany Tan, CPA Australia’s Audit and Assurance Policy Lead. 

“We support the AUASB’s efforts to provide clarity and consistency during this transition. However, practical challenges remain, particularly around evidencing ‘reasonable steps.’ 

“Clear, practical guidance will be essential to help auditors apply these requirements proportionately and consistently. Similarly, voluntary reporting provisions should only be incorporated once there is legislative certainty to avoid confusion and compliance risks.”

You can read the full submission here.