On 16 September 2025, the Australian Securities and Investments Commission (ASIC) issued frequently asked questions (FAQs) on the review and auditing requirements for sustainability reports under the Corporations Act 2001 (Corporations Act).

Background

Entities are required to prepare a sustainability report if they are required to prepare an annual financial report under Chapter 2M of the Corporations Act and meet one of the sustainability reporting thresholds in section 292A of the Corporations Act.

Entities that are required to prepare a sustainability report (reporting entities) must:

  • have the sustainability report reviewed (limited assurance) or audited (reasonable assurance) in accordance with the Corporations Act; and
  • obtain an auditor’s report on the sustainability report.

For financial years commencing before 1 July 2030, the sustainability report must be reviewed or audited to the extent required by the AUASB. From 1 July 2030, the sustainability report will be required to be audited.

FAQs

The non-exhaustive FAQs are intended to assist both auditors and preparers of sustainability reports and provide responses to the following questions:

  • If an entity is required to prepare a sustainability report, what are its obligations in relation to obtaining a review or audit?
  • What auditing standards apply to a review or audit of the sustainability report?
  • Who can conduct the review or audit of the sustainability report?
  • Does the same auditor need to be appointed for the financial reporting audit and sustainability reporting audit?
  • Where the auditor of the annual financial report and sustainability report is an audit company or audit firm, can different lead auditors and review auditors be appointed?
  • What opinion must the auditor of the sustainability report form under the Corporations Act?
  • What must the auditor’s report on the sustainability report contain (other than the auditor’s opinion to the extent required under the Corporations Act)?
  • Do modified liability settings apply to statements in an auditor’s report on the sustainability report?
  • Do the approval, removal and resignation requirements apply independently where there is more than one auditor?
  • How do the auditor independence requirements apply where there is more than one auditor or lead auditor?
  • How does the obligation to report to ASIC apply where there is more than one auditor or lead auditor?
  • Do annual transparency reporting obligations apply where sustainability reporting audits/reviews are conducted?
  • What is ASIC’s approach to supervision and enforcement?
  • Where can I find more information?

ASIC has announced that it will take a pragmatic and proportionate approach to supervision and enforcement as these requirements are being phased in and will more likely commence an enforcement investigation where there is evidence of misconduct of a serious or reckless nature.