5 Tips to Reduce the Risk of the ESEF Audit
The impact of the ESEF audit is a grey area for companies across Europe. Many different parties are still reviewing what the audit requirements will be for each country—and, it’s all a little complex.
With all of this uncertainty comes the potential for risk. Therefore, to help companies prepare for the ESEF audit, Willem Geijtenbeek, Digital Reporting Leader at PwC, and Andromeda Wood, Senior Director of Data Modelling at Workiva, recently shared their recommendations for steps you can follow for a smooth audit process with less risk in a webinar.
You will want to make sure you watch the whole webinar on demand, but in the meantime, here are their top five tips to reduce the risk of the ESEF audit:
1. Be proactive and keep an eye on any developments
National competent authorities and standard setters across Europe have not yet come out with their final instructions, so it is crucial that you keep a close eye on what your local jurisdiction is publishing. At this stage, the best way to prepare for an XBRL® audit is to be proactive to make sure you are ready and informed once more details are available.
2. Keep your flexibility in place
Whatever technology you choose to implement, it must be flexible because the situation will continue to be dynamic for some time. Plus, since everyone is doing this for the first time, you will want to be in a position where you can learn, and then have the flexibility to build and adapt based on these lessons.
Flexibility in a controlled environment is a good way to mitigate the risks of an uncertain situation. This means even if you are still undecided on exactly how you will move forward—for example, if you will follow a one document or two document process—make sure the technology you are using supports all your options, and offers robust controls and features such as track changes, a clear audit trail and more.
3. Take a step forward
We have had such a trying year that some companies have not even started looking for software to meet the ESEF requirements. But, that doesn’t mean you should just pick up an emergency solution. Even though it has been a challenging year, it is still not worth throwing time and effort away on a quick fix that does not provide any benefit for the following year.
You will want to implement a solution that not only gets you past the goalposts, but also helps you add value to your process while offering the option to upgrade to a more complete platform when you are ready.
4. Brush up on the requirement
Make sure you know the requirements of the ESEF and the XBRL tagging and anchoring. This will put you in a good position to understand what your auditors are going to be looking at. And, while the tagging side of the audit is not clear in all countries, you should still be looking at software that already supports a solid controlled process, and a provider with the relevant expertise, giving your auditors more comfort in your final report. This will put you on the right path to mitigate the risk of later audit checks on the tagging itself.
5. Start early!
Finally, do not wait to get started. Time is flying by, and you do not want to be in a position where your options are limited.
We would love to hear how you are preparing for the ESEF, so get in touch with us and let us know how we can help.
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