ESEF Audit: Key Takeaways from the Latest CEAOB Guidelines

December 7, 2021by Team IRIS CARBON

ESEF audit guidelines that the Committee of European Auditing Oversight Bodies (CEAOB) adopted on November 9, 2021, suggest a set of procedures for auditors while dealing with financial statements in the ESEF format.

The purpose of these ESEF audit guidelines is to describe the CEAOB’s expectations about auditors’ duties concerning ESEF documents in the absence of auditing standards that deal specifically with ESEF reporting.

It is now well known that the European Single Electronic Format (ESEF) mandate comes with an audit requirement that each EU member country needs to formulate independently. A recent development is the Germany Institute of Public Auditors’ finalization of a national audit standard for ESEF filings. More such announcements by other EU nations are sure to follow.

Auditors are also aware that while examining annual reports in the ESEF iXBRL (Inline XBRL) format, they are expected to mark their assurance on both the human-readable and machine-readable layers of the report.

The CEAOB’s procedures on ESEF audit go beyond what is now common knowledge to explain what must be the auditors’ approach to an ESEF document. Here’s a brief description of the procedures.

What the ESEF audit work plan should include

Per the CEAOB guidelines, auditors should consider the following while planning the ESEF audit process:

  • The characteristics of a firm’s financial statements prepared in ESEF format
  • The deadlines to be met for carrying out the procedures on financial statements in ESEF
  • The process put in place by the entity to prepare the financial statements in ESEF

Understanding financial statement preparation

Auditors are expected to understand the following with regards to a firm’s process of preparing financial statements in iXBRL.

  • The technical tools (software) and human resources a firm uses for its iXBRL preparation
  • Whether the firm has outsourced, partially or totally, its iXBRL preparation to a service provider or used a management expert
  • What controls the firm has designed and implemented to prevent, detect, or correct misstatements in the preparation of financial statements in ESEF

Procedures related to the xHTML format

Auditors need to implement the following checks concerning a firm’s xHTML document:

  • They need to verify that all financial statements that the firm has included in its annual financial report are prepared in the xHTML format
  • If the firm provides financial statements that are not yet prepared by ESEF requirements but later on provides the financial statements in ESEF, the auditors need to ensure that the two sets of information — financial statements in xHTML and the audited version — are aligned with each other

Procedures related to marking up (XBRL tagging)

ESEF auditors need to ensure that the firm has used the XBRL mark-up language to tag the information in its financial statement and that it has used elements from the core ESEF taxonomy with the closest accounting meaning to tag the information.

They also need to ensure that any extension taxonomy elements created comply with ESEF guidelines and are anchored to the core taxonomy elements “having the closest wider accounting meaning and/or scope to that extension taxonomy element of the issuer”.

Additional procedures

Among other things, an ESEF auditor will have to check the readability of a company’s ESEF documents using a software tool other than the one used by the company to prepare its financial statements in ESEF format. The use of a different tool is “in all cases a good practice, even where no specific national provision or standard mandates it”.


Our write-up is just a birds-ey view of the CEAOB guidelines. We suggest that you go through the actual CEAOB document for a more detailed examination of the guidelines.

If you’re looking for an ESEF audit software solution, look no further than IRIS xAudit® — a tool that is brought to you by the makers of the most trusted solution for ESEF iXBRL compliance, IRIS CARBON®.

Get in Touch with us for Your XBRL-based Compliance Reporting Needs.