April 26, 2024
Ms. Gabriela Figueiredo Dias
Chair
International Ethics Standards Board for Accountants

Re: Exposure Draft “Using the Work of an External Expert”
Dear Ms. Dias,

The Sustainability Reporting Committee (SRC) of the Securities Analysts Association of Japan(SAAJ) is pleased to comment on the Exposure Draft “Using the Work of an External Expert”(hereinafter referred to as the “ED”) published by the International Ethics Standards Board for
Accountants (IESBA) on January 29, 2024.
The SAAJ is a not-for-profit organization for professionals in the areas of investment and finance,
offering education and certification programs in these fields. Its certified member analysts (holdingthe CMA designation) number around 29,000.
The SRC is a standing committee of the SAAJ established in March 2021. It is composed of ten
members including equity and credit analysts, portfolio managers, public accountants, and academics.
On the same date, we also submitted a comment letter on the Exposure Draft “Proposed
International Ethics Standards for Sustainability Assurance (including International IndependenceStandards) (IESSA) and Other Revisions to the Code Relating to Sustainability Assurance andReporting” published by the IESBA on January 29, 2024.
Since there are limited areas where analysts and investors are able to comment on the ED, wecomment only on Evaluation of CCO for all Professional Services and Activities.

Evaluation of CCO for all Professional Services and Activities
2.

Do respondents support the approach regarding evaluating an external expert's competence,capabilities and objectivity? Are there other considerations that should be incorporated in theevaluation of CCO specific to PAIBs, PAPPs and SAPs? See Section V.

We basically support the proposed approach regarding evaluating an external expert’s competence,capabilities and objectivity (CCO).
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In assurance engagements on sustainability information covering a wide range of topics, it isexpected that the work of external experts may be used more than in audits of financial statements andthat there is a shortage of experts in the field of sustainability. In this regard, we welcome thepublication of the ED at the same time as the IESSA Exposure Draft, as it will increase discipline in
the use of the work of external experts.
However, we have the following suggestions for improvement:We encourage the IESBA to provide guidance and an explanatory memorandum with
illustrative examples of the evaluation methods to reduce diversity in practice among
sustainability assurance practitioners and to improve the understandability of users. As
practical experience is expected to accumulate rapidly in the early stages of sustainability
assurance, we also encourage the IESBA to revise the guidance and explanatory memorandum
in a timely manner.

We suggest that the IESBA encourage the International Auditing and Assurance Standards
Board (IAASB) to require disclosure of a summary of the work of the main external experts
used and the CCO evaluation of those experts. In our responses to the IAASB’s Exposure Draftof ISSA 5000, we argued that a summary of the use of external experts should be provided in
the assurance report 1. The explanation in the assurance report of the CCO evaluation of theexternal experts, in addition to their work, would improve the transparency of the use of thework of the external experts.

As the use of the work of external experts is important, we encourage the IESBA to work withthe International Organization of Securities Commissions (IOSCO) on how the use of the workof external experts will be reflected appropriately in the supervision and monitoring of eachjurisdiction. As there may be a need to require qualifications in some areas of expertise, wealso encourage the IESBA to work with IOSCO on this matter.

Sincerely yours,George Iguchi
Chair
Sustainability Reporting Committee
https://www.saa.or.jp/standards/sustainability/pdf/ikensho_231201en.pdf“Response Template for Exposure Draft of Proposed ISSA 5000, General Requirements for
Sustainability Assurance Engagements” (26)1―2―