ED-5000: RESPONSE TEMPLATE
August 2023

RESPONSE TEMPLATE FOR EXPOSURE DRAFT OF PROPOSEDISSA 5000, GENERAL REQUIREMENTS FOR SUSTAINABILITYASSURANCE ENGAGEMENTS
Guide for Respondents
Comments are requested by December 1, 2023. Note that requests for extensions of time cannot be
accommodated due to the accelerated timeline for finalization of this proposed standard.
This template is for providing comments on the Exposure Draft of proposed International Standard on
Sustainability Assurance EngagementsTM (ISSA) 5000, General Requirements for Sustainability
Assurance Engagements (ED-5000), in response to the questions set out in the Explanatory
Memorandum to ED-5000. It also allows for respondent details, demographics and other comments tobe provided. Use of the template will facilitate the IAASB’s automated collation of the responses.
You may respond to all questions or only selected questions.
To assist our consideration of your comments, please:•

For each question, start by indicating your overall response using the drop-down menu under eachquestion. Then below that include any detailed comments, as indicated.

•

When providing comments:•oRespond directly to the questions.

oProvide the rationale for your answers. If you disagree with the proposals in ED-5000, pleaseprovide specific reasons for your disagreement and specific suggestions for changes that
may be needed to the requirements, application material or appendices. If you agree withthe proposals, it will be helpful for the IAASB to be made aware of this view.

o

Identify the specific aspects of ED-5000 that your response relates to, for example, byreference to sections, headings or specific paragraphs in ED-5000.

o

Avoid inserting tables or text boxes in the template when providing your responses to thequestions because this will complicate the automated collation of the responses.

Submit your comments, using the response template only, without a covering letter or any
summary of your key issues, instead identify any key issues, as far as possible, in your responses
to the questions.

The response template provides the opportunity to provide details about your organization and, should
you choose to do so, any other matters not raised in specific questions that you wish to place on the
public record. All responses will be considered a matter of public record and will ultimately be posted on
the IAASB website.
Use the “Submit Comment” button on the ED-5000 webpage to upload the completed template.

Responses to IAASB’s Request for Comments in the Explanatory Memorandum for
ED-5000, General Requirements for Sustainability Assurance Engagements
PART A: Respondent Details and Demographic information
Your organization’s name (or your name if
you are making a submission in yourpersonal capacity)
Name(s) of person(s) responsible for thissubmission (or leave blank if the same asabove)The Securities Analysts Association of Japan (SAAJ)Kei Tsuchiya

Name(s) of contact(s) for this submission (orleave blank if the same as above)E-mail address(es) of contact(s)Geographical profile that best represents
your situation (i.e., from which geographicalperspective are you providing feedback on
ED-5000). Select the most appropriate
option.
The stakeholder group to which you belong(i.e., from which perspective are you
providing feedback on ED-5000). Select themost appropriate option.
Should you choose to do so, you may include
information about your organization (oryourself, as applicable).

ED-5000 | Response to request for comments

kei-tsuchiya@saa.or.jp
Asia Pacific
If “Other”, please clarify

Member body and other professional organization
If “Other”, please specify

The Sustainability Reporting Committee (SRC) of the
SAAJ is pleased to comment on ED-5000.
The SAAJ is a not-for-profit organization for professionals
in the areas of investment and finance, offering educationand certification programs in these fields. Its certified
member analysts (holding the CMA designation) number
around 29,000.
The SRC is a standing committee of the SAAJ
established in March 2021. It is composed of nine
members including equity and credit analysts, portfolio
managers, public accountants, and academics.
We would like to thank Ms. Sachiko Kai, a member of the
IAASB, for holding an online seminar for SRC members
and others on October 11, 2023 to explain the content of
ED-5000.

1

Should you choose to do so, you may provide overall views or additional background to your submission.
Please note that this is optional. The IAASB’s preference is that you incorporate all your views in yourcomments to the questions (also, the last question in Part B allows for raising any other matters in relation
to ED-5000).
Information, if any, not already included in responding to the questions in Parts B and C:

ED-5000 | Response to request for comments

2

PART B: Responses to Questions in in the Explanatory Memorandum for ED-5000
For each question, please start with your overall response by selecting one of the items in the dropdown list under the question. Provide your detailed comments, if any, below as indicated.
Overall Questions
1.

Do you agree that ED-5000, as an overarching standard, can be applied for each of the items
described in paragraph 14 of this EM to provide a global baseline for sustainability assurance
engagements? If not, please specify the item(s) from paragraph 14 to which your detailed
comments, if any, relate (use a heading for each relevant item).
(See Explanatory Memorandum Section 1-A, paragraph 14)

Overall response:

Agree, with comments below

Detailed comments (if any):(1) We welcome that the IAASB has published ED-5000. Sustainability information is becoming
increasingly important for analysts/investors in forecasting future cash flows and performance. We
have been advocating the urgent need on the part of analysts/investors for high quality, consistent,
and comparable global sustainability disclosure standards. We therefore welcomed that theInternational Sustainability Standards Board (ISSB) issued its inaugural IFRS Sustainability DisclosureStandards (ISSB Standards) in June 2023. We also thank the IAASB for its prompt publication of the
exposure draft of the assurance standards, which will provide a global baseline for ensuring thereliability of sustainability information.
(2) We agree in principle with the direction of the proposal in paragraph 14 of the Explanatory
Memorandum (EM), but would like to address some general comments and improvements to ED-5000
from the perspective of analysts/investors as users, as described below.
Guidance, educational materials, etc. in the principles-based approach(3) While we agree with the principles-based approach in developing the standards, we believe that
guidance, including examples, needs to be enhanced to ensure appropriate assurance engagements.
It is important for users that high quality assurance is provided based on appropriate assurance
processes, regardless of industry characteristics. The quality of assurance should not vary significantly
due to different judgments made by different assurance providers. We encourage the IAASB to provide
examples in its guidance on issues that may be difficult for assurance practitioners to judge, such as
management bias and the consideration or determination of materiality. Guidance should be developedthat is easily understood by assurance practitioners other than professional accountants who do nothave financial statement audit experience. Educational materials should also be enhanced to promote
understanding among users who are not necessarily familiar with assurance engagements.
(4) On the other hand, while corporate sustainability disclosures are not expected to be stable in the earlystages, boilerplate disclosure of sustainability information in response to overly rigorous assurance
procedures should be avoided. We encourage the IAASB to develop standards, application materials
and guidance that address this issue in assurance practice. As the practice of sustainability disclosureand assurance is expected to evolve rapidly, we believe that standards, application materials andguidance should be reviewed in a timely and appropriate manner in the early stages.
(5) Given that sustainability information prepared in accordance with the ISSB Standards and others will
be disclosed in statutory annual reports in each jurisdiction, it would be particularly important to ensure
ED-5000 | Response to request for comments3the quality of assurance engagements for statutory sustainability information. We believe that while
the principle-based approach is the basis of the assurance standards, the IAASB needs to treat
assurance engagements for statutory sustainability information as a separate category, to summarize
points to consider about the assurance processes, judgments, and other matters that are consistent
with the requirements of the ISSB Standards and others, and to provide guidance on these matters.
Connectivity between financial and sustainability information(6) The connectivity between financial and sustainability information is a very important issue for users.
The “Report on International Work to Develop a Global Assurance Framework for Sustainability-related
Corporate Reporting”, published by the Board of the International Organization of Securities
Supervisors (IOSCO) on March 28, 2023, states that “IOSCO encourages the standard setters toconsider the interconnectivity with audits of financial statements”. It is critical to ensure that there areno material inconsistencies or misstatements between the two sets of information. While overly
rigorous assurance procedures in the early stages of sustainability disclosure are not desirable, we
encourage the IAASB to establish mechanisms in the standards or others to ensure that rigorous
assurance engagements are implemented with respect to identifying material inconsistencies or
misstatements between financial and sustainability information.
(7) In this regard, ED-5000 requires the assurance practitioner to read the other information (paragraphs
11-12) and consider whether there is a material inconsistency or material misstatement between theother information and the sustainability information (paragraphs 155-159), but we believe thisrequirement is insufficient. In cases where the auditor of the financial statements and the assurance
practitioner of the sustainability information are different, we understand that it is difficult tocommunicate due to confidentiality issues. However, additional requirements should be included in thestandards to ensure the connectivity between the financial statements and the sustainability
information, such as confirmation of recognition in communications with management, those charged
with governance (TCWG), and others (hereinafter referred to as “TCWG, etc.”), and communications
between the auditor and the assurance practitioner with the participation of the TCWG, etc. We also
believe that the guidance on the above mentioned reading and considering other information,communication with the TCWG, etc., and communication between the auditor and the assurance
practitioner should be enhanced to ensure the connectivity between financial and sustainability
information.
(8) “Use by all assurance practitioners” in paragraph 14 of the EM states that “ED-5000 is intended to be
used by both professional accountants and non-accountant assurance practitioners”. This is a
profession-agnostic concept. However, given the importance of the connectivity between financial andsustainability information, some proposed to articulate in the standards that consistent financial
statement audit and sustainability assurance is desirable as one of the measures to address thechallenges accompanying connectivity.
EER Guidance(9) For assurance on non-financial information, there is “Non-Authoritative Guidance on Applying ISAE
3000 (Revised) to Sustainability and Other Extended External Reporting (EER) Assurance
Engagements” (EER Guidance). We understand that the EER Guidance will continue to be effective
under ISAE 3000 (Revised) after ISSA 5000 becomes effective. Some suggested that the EER
Guidance should be reviewed based on ISSA 5000. As the EER Guidance is considered to be thebasis for the development of the ISSA 5000 guidance, some suggested that the IAASB should provide
a roadmap of its plans for reviewing the EER Guidance.
ED-5000 | Response to request for comments

4

Public Interest Responsiveness2.

Do you agree that the proposals in ED-5000 are responsive to the public interest, considering thequalitative standard-setting characteristics and standard-setting action in the project proposal? If
not, why not?
(See Explanatory Memorandum Sections 1-B, and Appendix)

Overall response:

No response

Detailed comments (if any):Specific Questions
Applicability of ED-5000 and the Relationship with ISAE 3410
3.

Is the scope and applicability of ED-5000 clear, including when ISAE 3410 should be applied rather
than ED-5000? If not, how could the scope be made clearer?
(See Explanatory Memorandum Section 1-C)

Overall response:

No response

Detailed comments (if any):

Relevant Ethical Requirements and Quality Management Standards
4.

Is ED-5000 sufficiently clear about the concept of “at least as demanding” as the IESBA Coderegarding relevant ethical requirements for assurance engagements, and ISQM 1 regarding afirm’s responsibility for its system of quality management? If not, what suggestions do you havefor additional application material to make it clearer?
(See Explanatory Memorandum Section 1-D)

Overall response:

Yes, with comments below

Detailed comments (if any):(10) We believe that ED-5000 is sufficiently clear because the relevant ethical requirements and quality
management standards are the basis for assurance engagements.
(11) Sustainability assurance, like financial statement auditing, includes issues such as organizational
assurance (auditing) and management of conflicts of interest. We believe it is necessary to require
high ethical requirements and quality management standards for the assurance practitioner in orderfor users to have confidence in the sustainability report with the assurance report. Therefore, we agreewith the requirement to be “at least as demanding” as the IESBA Code and ISQM 1.
(12) In order for high ethical requirements and quality management standards to work, they should beproperly enforced in each jurisdiction and continuing education should be provided for assurance
practitioners. Therefore, we encourage the IAASB to clarify in the standards and others by whom andhow the “at least as demanding” requirements would be determined, and to fully engage with the
IOSCO on enforcement and education with respect to these requirements.
ED-5000 | Response to request for comments5Definitions of Sustainability Information and Sustainability Matters
5.

Do you support the definitions of sustainability information and sustainability matters in ED-5000?
If not, what suggestions do you have to make the definitions clearer?
(See Explanatory Memorandum Section 1-E, paras. 27-32)

Overall response:

Not Applicable

Detailed comments (if any):6.

Is the relationship between sustainability matters, sustainability information and disclosures clear?
If not, what suggestions do you have for making it clearer?
(See Explanatory Memorandum Section 1-E, paras. 35-36)

Overall response:

Not Applicable

Detailed comments (if any):

Differentiation of Limited Assurance and Reasonable Assurance
7.

Does ED-5000 provide an appropriate basis for performing both limited assurance and reasonableassurance engagements by appropriately addressing and differentiating the work effort between
limited and reasonable assurance for relevant elements of the assurance engagement? If not,what do you propose and why?
(See Explanatory Memorandum Section 1-F, paras. 45-48)

Overall response:

Not Applicable

Detailed comments (if any):

Preliminary Knowledge of the Engagement Circumstances, Including the Scope of the Engagement
8.

Is ED-5000 sufficiently clear about the practitioner's responsibility to obtain a preliminary
knowledge about the sustainability information expected to be reported and the scope of the
proposed assurance engagement? If not, how could the requirements be made clearer?
(See Explanatory Memorandum Section 1-F, para. 51)

Overall response:

Click to select from dropdown menu

Detailed comments (if any):

ED-5000 | Response to request for comments

6

9.

Does ED-5000 appropriately address the practitioner’s consideration of the entity’s “materiality
process” to identify topics and aspects of topics to be reported? If not, what approach do you
suggest and why?
(See Explanatory Memorandum Section 1-F, paras. 52-55)

Overall response:

No, with comments below

Detailed comments (if any):(13) We did not initially believe that ED-5000 appropriately addressed the concept of materiality. This isbecause, while paragraph A157 of ED-5000 and paragraph 54 of the EM state that the entity’s“materiality process” is not the same as the application of materiality by the practitioner, they do notstate that the concept of materiality is the same for the entity and the practitioner. Therefore, we wereconcerned that this would make it difficult for users to understand the concept of materiality.
(14) However, our concern has already been addressed by the “Frequently Asked Questions - Proposed
ISSA 5000: The Application of Materiality by the Entity and the Assurance” (FAQ) published by the
IAASB on October 25, 2023, As explained in the FAQ, ISSA 5000 should clearly state that the conceptof materiality is the same for the entity and the practitioner (i.e., it is a user-driven concept, that is, it isaffected by perceptions of the information needs of intended users of the sustainability information),and then should state that the entity’s “materiality process” is not the same as the application ofmateriality by the practitioner.
(15) With respect to the application of materiality, we believe that the key issue is to ensure confidence inthe process of identifying material sustainability information. The ISSB Standards require a preparerto ① identify sustainability-related risks and opportunities and ② disclose information that is material
with respect to the identified risks and opportunities. From users’ perspective, the most important issue
is to ensure that these processes are established and properly operated by an entity so that material
sustainability information is disclosed in a comprehensive and complete manner. Because ISSA 5000
is an overarching standard, it may be difficult to provide detailed requirements for the processes used
to identify material sustainability information. However, we believe that guidance should be developed
to address this issue and that a specific standard should be developed in the future.

Suitability and Availability of Criteria
10.

Does ED-5000 appropriately address the practitioner’s evaluation of the suitability and availabilityof the criteria used by the entity in preparing the sustainability information? If not, what do you
propose and why?
(See Explanatory Memorandum Section 1-F, paras. 56-58)

Overall response:

No response

Detailed comments (if any):

ED-5000 | Response to request for comments

7

11.

Does ED-5000 appropriately address the notion of “double materiality” in a framework-neutral way,
including how this differs from the practitioner’s consideration or determination of materiality? If
not, what do you propose and why?
(See Explanatory Memorandum Section 1-F, paras. 59-60 and 68)

Overall response:

No response

Detailed comments (if any):

Materiality
12.

Do you agree with the approach in ED-5000 for the practitioner to consider materiality for
qualitative disclosures and determine materiality (including performance materiality) for
quantitative disclosures? If not, what do you propose and why?
(See Explanatory Memorandum Section 1-F, paras. 65-74)

Overall response:

No response

Detailed comments (if any):

Understanding the Entity’s System of Internal Control
13.

Do you agree with the differentiation in the approach in ED-5000 for obtaining an understandingof the entity’s system of internal control for limited and reasonable assurance engagements? If
not, what suggestions do you have for making the differentiation clearer and why?
(See Explanatory Memorandum Section 1-F, paras. 75-81)

Overall response:

No response

Detailed comments (if any):

Using the Work of Practitioner’s Experts or Other Practitioners
14.

When the practitioner decides that it is necessary to use the work of a firm other than thepractitioner’s firm, is ED-5000 clear about when such firm(s) and the individuals from that firm(s)are members of the engagement team, or are “another practitioner” and not members of theengagement team? If not, what suggestions do you have for making this clearer?
(See Explanatory Memorandum Section 1-G, paras. 82-87)

Overall response:

No response

Detailed comments (if any):

ED-5000 | Response to request for comments

8

15.

Are the requirements in ED-5000 for using the work of a practitioner’s external expert or anotherpractitioner clear and capable of consistent implementation? If not, how could the requirements bemade clearer?
(See Explanatory Memorandum Section 1-G, paras. 88-93)

Overall response:

No response

Detailed comments (if any):

Estimates and Forward-Looking Information
16.

Do you agree with the approach to the requirements in ED-5000 related to estimates and forwardlooking information? If not, what do you propose and why?
(See Explanatory Memorandum Section 1-G, paras. 94-97)

Overall response:

Agree, with comments below

Detailed comments (if any):(16) We agree with the proposal on estimates and forward-looking information. Some comments areprovided below.
(17) Estimates and forward-looking information are often presented using processed data, such as graphs
and charts. Paragraph 134 provides the procedures for estimates and forward-looking information. We
believe that ISSA 5000 should include a requirement for the assurance practitioner to consider theappropriateness of these presentations of processed data.
(18) Estimates and forward-looking information are often presented with the base dates, measurement
methods, assumptions, reasoning processes, and other information in accordance with the disclosure
criteria. We believe that ISSA 5000 should include a requirement for the assurance practitioner toconsider the appropriateness of these presentations in confirming that there are no material
misstatements.

Risk Procedures for a Limited Assurance Engagement
17.

Do you support the approach in ED-5000 to require the practitioner to design and perform risk
procedures in a limited assurance engagement sufficient to identify disclosures where material
misstatements are likely to arise, rather than to identify and assess the risks of material
misstatement as is done for a reasonable assurance engagement? If not, what approach would
you suggest and why?
(See Explanatory Memorandum Section 1-G, paras. 98-101)

Overall response:

No response

Detailed comments (if any):

ED-5000 | Response to request for comments

9Groups and “Consolidated” Sustainability Information
18.

Recognizing that ED-5000 is an overarching standard, do you agree that the principles-based
requirements in ED-5000 can be applied for assurance engagements on the sustainability
information of groups or in other circumstances when “consolidated” sustainability information ispresented by the entity? If not, what do you propose and why?
(See Explanatory Memorandum Section 1-G, paras. 102-107)

Overall response:

No response

Detailed comments (if any):

Fraud
19.

Do you agree that ED-5000 appropriately addresses the topic of fraud (including “greenwashing”)
by focusing on the susceptibility of the sustainability information to material misstatement, whether
due to fraud or error? If not, what suggestions do you have for increasing the focus on fraud andwhy?
(See Explanatory Memorandum Section 1-G, paras. 108-110)

Overall response:

Agree, with comments below

Detailed comments (if any):(19) We agree with the proposal on fraud. We believe that in judging and responding to fraud, it is criticalthat misstatements are properly identified and evaluated. Some comments are provided below.
(20) As greenwashing, a form of fraud, is one of the most critical elements of misstatements, guidanceshould cover such cases.

Communication with Those Charged with Governance20.

Do you support the high-level requirement in ED-5000 regarding communication withmanagement, those charged with governance and others, with the related application material on
matters that may be appropriate to communicate? If not, what do you propose and why?
(See Explanatory Memorandum Section 1-G, paras. 111-112)

Overall response:

Yes, with comments below

Detailed comments (if any):(21) We support the proposal on communication with TCWG, etc.
(22) However, as stated in our response (7) to Question 1, in cases where the auditor of the financial
statements and the assurance practitioner of the sustainability information are different, additional
requirements should be included in the standards to ensure the connectivity between the financial
statements and the sustainability information, such as confirmation of recognition in communications
with the TCWG, etc. Therefore, the guidance should be enhanced by providing examples of mattersto be communicated.
ED-5000 | Response to request for comments

10(23) As stated in paragraph 112 of the EM, in order to enhance the assurance procedures without omitting
any necessary considerations while taking into account the differences in laws and regulations on
governance in each jurisdiction, examples of matters to be communicated in general, not limited to theconnectivity between financial and sustainability information, should be provided, including the entity’s
governance structure and materiality process, which are critical matters for users.

Reporting Requirements and the Assurance Report
21.

Will the requirements in ED-5000 drive assurance reporting that meets the information needs ofusers? If not, please be specific about any matters that should not be required to be included in
the assurance report, or any additional matters that should be included.
(See Explanatory Memorandum Section 1-G, paras. 116-120, 124-130)

Overall response:

Yes, with comments below

Detailed comments (if any):(24) We agree in principle with the proposal on reporting requirements and the assurance report, whichuses a format similar to the audit report for financial statements. However, we would like to suggest
some improvements below.
(25) Sustainability assurance is expected to be diverse in terms of the sustainability topics disclosed(climate related, biodiversity, human capital, human rights, etc.), the scope of information disclosed,
the disclosure criteria, the assurance level, the assurance procedures and the characteristics of theassurance practitioners and is not expected to be a level engagement such as financial statement
auditing. Therefore, we believe it is important to explain in the assurance report with some specificity
what procedures have been applied to certain sustainability information in order to enable users tounderstand the assurance engagement in detail. We encourage the IAASB to consider these points in
describing the requirements and to describe them as clearly as possible, keeping in mind theunderstandability of users.
(26) Since the use of external experts and other assurance practitioners is more important in sustainability
assurance than in financial statement audit, a summary of the use of external experts and otherassurance practitioners should be provided in the assurance report.
(27) We regret to say that analysts/investors as users do not necessarily understand the audit andassurance engagement in detail. In this regard, we are concerned that users may be confused byvarious variations of assurance reports, including a combination of sustainability information preparedin accordance with fair presentation/compliance criteria and reasonable/limited assurance as stated inAppendix 2 “Illustrations of Assurance Reports on Sustainability Information” in ED-5000. Therefore,
we encourage the IAASB to provide educational materials to help users (and possibly preparers)
understand the difference between sustainability information prepared in accordance with fairpresentation criteria and compliance criteria and between reasonable assurance and limited
assurance.

ED-5000 | Response to request for comments

11

22.

Do you agree with the approach in ED-5000 of not addressing the concept of “key audit matters”
for a sustainability assurance engagement, and instead having the IAASB consider addressing
this in a future ISSA? If not, what do you propose and why?
(See Explanatory Memorandum Section 1-G, paras. 121-123)

Overall response:

Neither agree/disagree, but see comments below

Detailed comments (if any):(28) We believe that there is a need for a reporting framework with features similar to key audit matters(KAM) to enable users to understand the assurance process. Therefore, we encourage the IAASB toconsider the desirable framework for this type of reporting.
(29) As sustainability assurance is still in its early stages, we believe that in order to provide users with abasis for assessing the quality of the assurance by understanding the matters that the assurance
practitioner has identified as having a high risk of misstatement and the response to them, there is ahigh need for reporting similar to KAM in sustainability assurance as there is a need for KAM in financial
statement auditing. This high need applies not only to reasonable assurance, but also to limited
assurance. We also believe that requiring reporting similar to KAM will foster communication between
the TCWG, etc. and the assurance practitioner, which will enhance the response to misstatements due
to fraud, including greenwashing. Therefore, we believe that a roadmap for reporting similar to KAM
should be provided for future implementation.
(30) Some commented that in a report similar to KAM, it would be more useful to present not only theprocedures addressed, but also the findings of the assurance practitioner and the outcome of theassurance procedures.

23.

For limited assurance engagements, is the explanation in the Basis for Conclusion section of theassurance report that the scope and nature of work performed is substantially less than for areasonable assurance engagement sufficiently prominent? If not, what do you propose and why?
(See Explanatory Memorandum Section 1-G, para. 131)

Overall response:

Yes (with no further comments)

Detailed comments (if any):

Other Matters
24.

Are there any public sector considerations that need to be addressed in ED-5000?
(See Explanatory Memorandum Section 1-I, para. 135)

Overall response:

No response

Detailed comments (if any):

ED-5000 | Response to request for comments

12

25.

Are there any other matters you would like to raise in relation to ED-5000?

Overall response:

Yes, as further explained below

Detailed comments (if any):
Sustainability assurance standards projects following ISSA 5000(31) We understand that the IAASB is considering the development of specific individual standards forsustainability assurance following the development of the overarching ISSA 5000. We have thefollowing comments on the specific standards.
(32) We believe that the specific standards should be developed along two axes: “thematic” (e.g. climaterelated, human capital, etc.) and “engagement phase” (e.g. the judgement of materiality, group andconsolidated sustainability information, etc.).
(33) In order to clarify the system of thematic and engagement phase specific standards, we would like topropose that branch numbers be added under the ISSA 5000 series. For example, the series ofthematic standards should be ISSA 5100 and the series of engagement phase specific standards
should be ISSA 5200.
(34) Among the thematic standards, we believe that the highest priority is climate-related, as IFRS S2 was
first published as a thematic standard in the ISSB Standards. The next highest priorities are biodiversity,
human capital and human rights, which the ISSB proposed as new research and standard-setting
projects in the Request for Information (RFI) “Consultation on Agenda Priorities” published on May 4,2023. We believe that human capital has the highest priority. For further details, please see ourcomments on Question 3 of the RFI (*).
(*) https://www.saa.or.jp/standards/sustainability/pdf/ikensho_230901en.pdf(35) Among the engagement phase standards, we believe that the judgement of materiality is the highest
priority. In judging materiality, there may be a difference between the materiality applied by the entity
and the assurance practitioner and the materiality expected by users, resulting in an expectation gap.
If a material misstatement on a material sustainability issue is found in a sustainability report withassurance, the issue of comprehensiveness and completeness of the sustainability reporting and its
assurance would become serious, raising concerns that the social credibility of the assurance
engagement would be compromised. Therefore, we believe that the development of a specificstandard for the judgement of materiality should be given high priority.

Part C: Request for General Comments
The IAASB is also seeking comments on the matters set out below:
26.

Translations—Recognizing that many respondents may intend to translate the final ISSA for
adoption in their own environments, the IAASB welcomes comment on potential translation issues
respondents note in reviewing ED-5000.

Overall response:

No response

Detailed comments (if any):

ED-5000 | Response to request for comments

13

27.

Effective Date—As explained in paragraph 138 of Section 1-I – Other Matters, the IAASB believes
that an appropriate effective date for the standard would be for assurance engagements onsustainability information reported for periods beginning or as at a specific date approximately 18
months after approval of the final standard. Earlier application would be permitted and encouraged.
Do you agree that this would provide a sufficient period to support effective implementation of the
ISSA. If not, what do you propose and why?

Overall response:

No response

Detailed comments (if any):

ED-5000 | Response to request for comments

14