ACCA asks for "bold approach" to the review of NFRD, and you suppose that external assurance over the NFR should be mandatory. The additional burden on business in times of crisis may not be approved by the professional community. Is your proposal a strategic long-term one?
R. M.: Our proposal is a strategic one because changing EU law is for the long term. Our view is that both the financial statements and the further information that would be in the management report are important for investors and others and that logically both should be subject to independent assurance. Already many listed companies are choosing that on a voluntary basis and the current Directive left to member states the possibility of making it mandatory. We think that EU law can now move ahead and require assurance of the management report in addition to the audit of the financial statements. However we recognise there are some practical difficulties and significant cost in providing the assurance and so to minimise them we have proposed that it should be at a limited level rather than reasonable.
Your report confirms that companies use various non-financial standardization bases (
Framework, GRI, TCFD, SDGs). Do you think the Oxford Union idea of one global non-financial standard is hopeless?
R. M.: I attended that debate in Oxford. I agree with the idea of one global standard for non-financial reporting and in our view that would be best done by the IFRS Foundation as proposed in the Accountancy Europe cogito paper of December 2019. As part of this revision of the NFRD the EU seem likely to set up a non-financial reporting standard setter. We hope that would be or become a global one.
In your opinion, is the
Framework suitable to be the basis for a single European standard of non-financial reporting?
R. M.: Very much so. The