Draft Ethics Standard for Sustainability Assurance

The Professional Ethics Board of the Indonesian Institute of Certified Public Accountants, the Code of Ethics Board of the Institute of Indonesia Chartered Accountants, and the Ethics Committee of the Institute of Management Accountants approved the Exposure Draft of the Ethics Standard for Sustainability Assurance, including its Independence Standard, on 17 September 2026. The draft adopts the International Ethics Standards for Sustainability Assurance issued by the IESBA.

A second draft came out at the same time, revising the Code of Ethics on using the work of external experts. Comments on both are due to the three bodies by 20 November 2026.

A company publishing a sustainability report may ask an accounting firm to help gather the data, then ask the same firm to examine it.

Scope of the independence standard

The draft’s overview says the ethics standard for sustainability assurance is designed to match the ethics and independence standards for financial statement audits. The reason given is that sustainability information is widely used to assess performance, risk and long-term prospects.

The Independence Standard in Part 5 does not apply to every engagement. Paragraph 5400.3b limits it to sustainability information reported under a general purpose framework. The second condition is that the information is required by law or regulation or publicly disclosed to support decisions by investors and other users.

Engagements outside that limit still require independence, under Part 4B of the Code. Paragraph 5400.3e gives examples: reports prepared on the entity’s own criteria, or assurance reports with restricted use and distribution.

The Part 5 Independence Standard applies to both reasonable and limited assurance. The draft is also framework-neutral, so it is not tied to one assurance standard.

Limits on sustainability data services

The provision that bears directly on engagement arrangements is in Section 5601. For public interest entities the prohibition has no exception. Paragraph P5601.6 says a firm or network firm shall not provide sustainability data and information services that may affect the information on which the firm gives its opinion to a sustainability assurance client that is a public interest entity.

For other entities, paragraph P5601.5 leaves narrow room. Data services are allowed only if they are routine or mechanical and the firm addresses any threat at an unacceptable level.

Gathering supplier emissions data, choosing conversion factors or designing a calculation method can hardly be called mechanical. Work of that kind shapes the figures later examined.

The transition provisions give relief to work under way. Non-assurance services begun before 31 December 2026 that Section 5600 would later prohibit may continue under the existing requirements, for at most one reporting cycle.

The proposed effective date covers assurance on sustainability information for periods beginning on or after 31 December 2026. For calendar-year companies the first period affected is 2027, with the assurance report issued in 2028.

Independence requirements for assurance work on value chain components, in Sections 5405 and 5406, are proposed to apply to periods beginning on or after 1 July 2028. Before that date, a firm leading a group engagement must publicly disclose that those requirements have not been applied.

The external experts draft covers a nearby situation. Its overview names sustainability, technology and tax as fields increasingly needing outside experts, and the revision asks firms to evaluate an expert’s competence, capability and objectivity before using the work. Its requirements for sustainability assurance engagements are proposed to apply from the same date, periods beginning on or after 31 December 2026.

Data readiness is covered in the Indonesian article on ISSA 5000 preparation.