Accounting and auditing firms are seeing more demand from companies for sustainability reporting as investors pour money into environmental, social and governance (ESG) funds. Companies want to demonstrate they’re being good corporate citizens that are concerned about issues like climate change and diversity in their ranks. But differences have emerged over how to measure the companies on how well they are performing, leading to competing sets of ESG standards and frameworks. One of the main providers is the Global Reporting Initiative, an Amsterdam-based group whose standards are widely used in Europe as well as the U.S. and other parts of the world. I recently talked with the new CEO, Eelco van der Enden, about his plans for GRI and how it will work with the recently established International Sustainability Standards Board.
The ISSB is in the process of being organized by the International Financial Reporting Standards Foundation, which also oversees the International Accounting Standards Board. The new ISSB will unite some of the existing standard-setters under its umbrella, including the Value Reporting Foundation (which oversees the Sustainability Accounting Standards Board and the International Integrated Reporting Council) and the Climate Disclosure Standards Board. It just named a new vice-chair, Sue Lloyd, who is coming over from the IASB, and a special advisor to the chair, Janine Guillot, who is currently CEO of the Value Reporting Foundation. The moves should help ensure close ties with the IASB and the VRF, as well as SASB, which Guillot has led as well. Marie-Laure Delarue, global assurance vice chair at EY, recently talked to me in our On the Air podcast about how accounting firms can offer audit and assurance services to help companies with their ESG reporting, and she shared her thoughts on the new ISSB.
In addition to ESG matters, accountants and auditors are increasingly being called upon by clients to help them account for their cryptocurrency assets. That can be complicated, especially with the volatile swings in the crypto market that have been affecting not only individual investors in digital currencies like Bitcoin and Ether, but also companies like MicroStrategy that hold such assets after it disclosed that the Securities and Exchange Commission sent it a warning letter. The AICPA recently updated its practice aid for accounting and auditing of digital assets, with new material about how to account for crypto assets. The AICPA has added the caveat that the guidance is nonauthoritative, but many investors would like to see the Financial Accounting Standards Board offer new standards for how to account for crypto.
The SEC has also been keeping a close eye on the crypto market, as well as FASB’s new lease accounting standard, which private companies are starting to implement. Public companies have already been required to use the new leases standard, also known as ASC 842, since 2019, but the SEC has been seeing some problems with the way companies are sending in their financial filings to its EDGAR system and how they’re tagging them in XBRL format. The SEC issued an advisory about that topic on Friday.
Forensic accounting has been a growing niche in the profession for many years, but increasingly accountants with forensic investigation skills are helping clients with their cybersecurity needs. Nathan Fisher and Eric Hines of StoneTurn explain how forensic accounting and cybersecurity experts can team up to help companies patch up their cyber weaknesses.
Cybersecurity is also an area that audit committees have increasingly been dealing with, on top of issues like ethics, enterprise risk management and ESG, according to a new survey from Deloitte and the Center for Audit Quality. Stephen Dabney, leader of KPMG’s Audit Committee Institute, offered some suggestions in this column on how to prioritize the audit committee’s packed agenda. It’s a full plate that auditors and accountants are dealing with this year. I hope you have a good week ahead, and thanks for subscribing and reading.

Vice-chair appointed to International Sustainability Standards Board

By Michael Cohn 5 min read

IASB vice-chair Sue Lloyd will become vice-chair of the new board, while Value Reporting Foundation CEO Janine Guillot will be special advisor to the ISSB's chair. Read story →

Auditing ESG reports on climate change and sustainability

By Michael Cohn

EY's Marie-Laure Delarue discusses how accountants can help companies with their ESG reporting, and the formation of the new International Sustainability Standards Board. Read story →

MicroStrategy’s slide accelerates after SEC accounting ruling

By Crystal Kim 2 min read

The slide extended to a second day as investors reassessed the company’s Bitcoin buying strategy. Read story →

Best practices for IT security

Cybersecurity and forensic accounting join forces to combat criminals

By Eric Hines, Nathan Fisher 4 min read

The solutions to these complex problems are best guided by multifaceted teams adept at bridging the gap between technology and finance. Read story →