STANDARDIZATION OF COMPANIES’ SUSTAINABILITY REPORTING AUDIT

Abstract

Purpose. The purpose of the article is to justify the use of sustainability reporting assurance standards to streamline the process of verification of such reporting in the interests of stakeholders. Methodology / approach. The methodological basis of the study is a comparative and content analysis of internationally recognized standards for the audit of sustainability reporting, including the AA1000 (AA1000AS, AccountAbility) and the International Standard on Assurance Engagements (International Standard on ISAE 3000) «Non-Audit Assurance or Review of Historical Financial Information» IBAA. Use of these analytical tools highlighted the benefits and limitations of these standards. Results. Authors defined that the provision of independent audit confirmation of sustainability reporting is characterized by a growing trend among the world’s largest companies. Assurance is one of the conditions for ensuring confidence in sustainability reporting for stakeholders, and accordingly, standardization of audit is a guarantee of the quality of its conduct and the reliability of the auditor’s conclusions. The analysis of volumes of verified sustainability reporting submission and comparative analysis of the two primary standards in the field of its audit by the main criteria was conducted. These criteria cover standards status, purpose, verifiers, processes, requirements, volumes, and principles of conduct, results in preparation and features of publication of the auditor’s opinion. Originality / scientific novelty. The importance and feasibility of applying the internationally recognized standards AA1000 and ISAE 3000 as benchmarks for standardizing sustainability reporting based on their identified advantages and disadvantages are substantiated. A comparative description and assessment of the frequency of practical application of these standards for auditing reporting on sustainable development was further developed. Practical value / implications. Taking into account the benefits and limitations of the analyzed standards at the regulatory level, in particular in Ukraine, national approaches to standardizing the audit of sustainability reporting can be developed. At the level of individual companies, in particular large agricultural holdings, these standards can be used in parallel in the communication field of their interaction with stakeholders, depending on the categories of those stakeholders.