GRI ESRS-Professional Practice Exams
Last updated on Oct 21,2026- Exam Code: ESRS-Professional
- Exam Name: ESRS Professional Certification Exam
- Certification Provider: GRI
- Latest update: Oct 21,2026
Question #1
Which of the following correctly fills the gaps in the paragraph below?
The first set of the ESRS consist of several standards: The first group includes __________ General requirements and __________ General disclosures. These standards apply regardless of the specific sustainability topic being reported.
The next group includes ten __________ that cover various topics across the three dimensions of sustainable development. For example, ESRS E1 focuses on the environmental dimension, particularly climate change.
Finally, the last group includes the __________ which are currently under development.
- A . ESRS 2; topical standards; sector-specific standards; ESRS 1
- B . ESRS 2; ESRS 1; topical standards; sector-specific standards
- C . ESRS 1; ESRS 2; topical standards; sector-specific standards
- D . topical standards; ESRS 2; ESRS 1; sector-specific standards
Correct Answer: C
C
Explanation:
The ESRS (European Sustainability Reporting Standards) framework consists of three primary categories of standards:
ESRS 1 (General Requirements):
ESRS 1 sets out the fundamental principles and requirements for sustainability reporting.
It provides an overview of the structure and drafting conventions of the ESRS framework, defining the categories of ESRS standards: cross-cutting, topical, and sector-specific.
It also establishes the double materiality principle as the basis for sustainability disclosures.
ESRS 2 (General Disclosures):
ESRS 2 outlines the core disclosure requirements applicable to all sustainability topics, ensuring comparability and completeness.
It includes general governance, strategy, impact, risk, and opportunity management disclosures applicable to all sustainability topics.
These disclosure requirements apply to all undertakings regardless of the specific sustainability topics being reported.
Topical Standards:
The ESRS framework includes ten topical standards covering the three key dimensions of sustainability:
Environmental (E): ESRS E1 (Climate Change), ESRS E2 (Pollution), ESRS E3 (Water & Marine Resources), ESRS E4 (Biodiversity & Ecosystems), and ESRS E5 (Resource Use & Circular Economy). Social (S): ESRS S1 (Own Workforce), ESRS S2 (Workers in the Value Chain), ESRS S3 (Affected Communities), and ESRS S4 (Consumers & End-users). Governance (G): ESRS G1 (Business Conduct).
These standards provide specific requirements on sustainability matters, complementing the general
disclosure requirements in ESRS 2.
Sector-Specific Standards:
Sector-specific ESRS are currently under development.
These will address sustainability matters specific to different industries, ensuring that sectoral nuances are properly considered.
They aim to fill gaps not sufficiently covered by the topical standards by defining industry-specific impacts, risks, and opportunities.
Why is C. ESRS 1; ESRS 2; topical standards; sector-specific standards the correct answer?
ESRS 1 (General Requirements) comes first, setting the foundation.
ESRS 2 (General Disclosures) follows, providing cross-cutting disclosure requirements.
Topical standards are next, covering specific sustainability topics.
Sector-specific standards are the final category, though they are still in development.
Thus, the correct order aligns with the official structure of the ESRS framework as mandated in Commission Delegated Regulation (EU) 2023/2772.
Official Commission Delegated Regulation (EU) 2023/2772, various EFRAG guidance documents, and
CSRD-related references:
Commission Delegated Regulation (EU) 2023/2772, Annex I: Structure of the ESRS framework.
EFRAG Compilation of Explanations (January – November 2024): Explanation of ESRS categories. EFRAG Mapping of Sustainability Matters to Topical Disclosures (Q&A ID 177): Confirmation of ESRS 1, ESRS 2, and the ten topical standards.
C
Explanation:
The ESRS (European Sustainability Reporting Standards) framework consists of three primary categories of standards:
ESRS 1 (General Requirements):
ESRS 1 sets out the fundamental principles and requirements for sustainability reporting.
It provides an overview of the structure and drafting conventions of the ESRS framework, defining the categories of ESRS standards: cross-cutting, topical, and sector-specific.
It also establishes the double materiality principle as the basis for sustainability disclosures.
ESRS 2 (General Disclosures):
ESRS 2 outlines the core disclosure requirements applicable to all sustainability topics, ensuring comparability and completeness.
It includes general governance, strategy, impact, risk, and opportunity management disclosures applicable to all sustainability topics.
These disclosure requirements apply to all undertakings regardless of the specific sustainability topics being reported.
Topical Standards:
The ESRS framework includes ten topical standards covering the three key dimensions of sustainability:
Environmental (E): ESRS E1 (Climate Change), ESRS E2 (Pollution), ESRS E3 (Water & Marine Resources), ESRS E4 (Biodiversity & Ecosystems), and ESRS E5 (Resource Use & Circular Economy). Social (S): ESRS S1 (Own Workforce), ESRS S2 (Workers in the Value Chain), ESRS S3 (Affected Communities), and ESRS S4 (Consumers & End-users). Governance (G): ESRS G1 (Business Conduct).
These standards provide specific requirements on sustainability matters, complementing the general
disclosure requirements in ESRS 2.
Sector-Specific Standards:
Sector-specific ESRS are currently under development.
These will address sustainability matters specific to different industries, ensuring that sectoral nuances are properly considered.
They aim to fill gaps not sufficiently covered by the topical standards by defining industry-specific impacts, risks, and opportunities.
Why is C. ESRS 1; ESRS 2; topical standards; sector-specific standards the correct answer?
ESRS 1 (General Requirements) comes first, setting the foundation.
ESRS 2 (General Disclosures) follows, providing cross-cutting disclosure requirements.
Topical standards are next, covering specific sustainability topics.
Sector-specific standards are the final category, though they are still in development.
Thus, the correct order aligns with the official structure of the ESRS framework as mandated in Commission Delegated Regulation (EU) 2023/2772.
Official Commission Delegated Regulation (EU) 2023/2772, various EFRAG guidance documents, and
CSRD-related references:
Commission Delegated Regulation (EU) 2023/2772, Annex I: Structure of the ESRS framework.
EFRAG Compilation of Explanations (January – November 2024): Explanation of ESRS categories. EFRAG Mapping of Sustainability Matters to Topical Disclosures (Q&A ID 177): Confirmation of ESRS 1, ESRS 2, and the ten topical standards.
Question #2
Which of the following statements best captures the shift introduced by the CSRD compared to the NFRD?
- A . The CSRD maintains the NFRD’s voluntary approach to assurance, allowing organizations to select their own providers and define the assurance scope.
- B . The CSRD eliminates the need for sustainability reporting assurance entirely, simplifying compliance for organizations.
- C . The CSRD introduces mandatory assurance for ESRS reporting, with defined requirements for scope, standards, and providers.
Correct Answer: C
C
Explanation:
The Corporate Sustainability Reporting Directive (CSRD) significantly strengthens sustainability reporting and assurance requirements compared to the Non-Financial Reporting Directive (NFRD). The key shift introduced by CSRD is the mandatory assurance of sustainability reports, which includes
Disclosure Framework High-level requirements
Expanded to all large companies and listed SMEs
Detailed ESRS framework with sector-specific standards
Key Provisions of the CSRD:
Mandatory Assurance:
Unlike the NFRD, the CSRD requires sustainability reports to be assured by an independent external provider.
The assurance process follows ESRS standards to ensure consistency.
Defined Standards and Scope:
CSRD specifies the scope of assurance, focusing on material sustainability disclosures, governance, and risk disclosures.
The European Commission is developing a standard methodology for assurance.
Transition to Reasonable Assurance:
Initially, limited assurance is required.
By October 2028, the EU aims to transition to reasonable assurance, aligning sustainability assurance with financial audits.
Why Other Answers Are Incorrect:
Option A: Incorrect C The CSRD makes assurance mandatory, whereas the NFRD had a voluntary approach.
Option B: Incorrect C The CSRD does not eliminate sustainability reporting assurance; it makes it more structured and rigorous.
Thus, the correct answer is C:
The CSRD introduces mandatory assurance for ESRS reporting, with defined requirements for scope, standards, and providers.
Official
Reference: CSRD Directive (EU) 2022/2464 C Assurance Provisions.
EU Platform on Sustainable Finance Report (February 2025) C Assurance and Compliance Guidelines. CEAOB Guidelines on Assurance of Sustainability Reporting (2024) C Limited Assurance Transitioning to Reasonable Assurance.
C
Explanation:
The Corporate Sustainability Reporting Directive (CSRD) significantly strengthens sustainability reporting and assurance requirements compared to the Non-Financial Reporting Directive (NFRD). The key shift introduced by CSRD is the mandatory assurance of sustainability reports, which includes
Disclosure Framework High-level requirements
Expanded to all large companies and listed SMEs
Detailed ESRS framework with sector-specific standards
Key Provisions of the CSRD:
Mandatory Assurance:
Unlike the NFRD, the CSRD requires sustainability reports to be assured by an independent external provider.
The assurance process follows ESRS standards to ensure consistency.
Defined Standards and Scope:
CSRD specifies the scope of assurance, focusing on material sustainability disclosures, governance, and risk disclosures.
The European Commission is developing a standard methodology for assurance.
Transition to Reasonable Assurance:
Initially, limited assurance is required.
By October 2028, the EU aims to transition to reasonable assurance, aligning sustainability assurance with financial audits.
Why Other Answers Are Incorrect:
Option A: Incorrect C The CSRD makes assurance mandatory, whereas the NFRD had a voluntary approach.
Option B: Incorrect C The CSRD does not eliminate sustainability reporting assurance; it makes it more structured and rigorous.
Thus, the correct answer is C:
The CSRD introduces mandatory assurance for ESRS reporting, with defined requirements for scope, standards, and providers.
Official
Reference: CSRD Directive (EU) 2022/2464 C Assurance Provisions.
EU Platform on Sustainable Finance Report (February 2025) C Assurance and Compliance Guidelines. CEAOB Guidelines on Assurance of Sustainability Reporting (2024) C Limited Assurance Transitioning to Reasonable Assurance.
Question #3
What disclosures must be included in the sustainability statement? Select all that apply.
- A . General Disclosure Requirements from ESRS 2
- B . Environmental objectives under the EU Taxonomy Regulation
- C . Financial performance metrics from IFRS reports
- D . Governance-related information determined by the materiality assessment
Correct Answer: A, D B
A, D B
Explanation:
The sustainability statement under ESRS is structured according to ESRS 1 and ESRS 2, outlining specific disclosure requirements. The required disclosures include: General Disclosure Requirements from ESRS 2
ESRS 2 outlines general disclosure requirements, including governance, strategy, and impact, risk, and opportunity management (IROs). These disclosures are mandatory for all undertakings, providing the foundation of the sustainability statement.
✅ (A) is correct
Environmental Objectives under the EU Taxonomy Regulation
Companies must disclose their alignment with the EU Taxonomy Regulation, particularly under Article 8 of Regulation (EU) 2020/852, which includes financial and non-financial companies’ obligations regarding taxonomy-aligned activities.
✅ (B) is correct
Financial Performance Metrics from IFRS Reports
Financial metrics from IFRS are NOT a required disclosure under ESRS. The sustainability statement focuses on non-financial reporting, while financial performance remains under IFRS standards in financial statements.
❌ (C) is incorrect
Governance-Related Information Determined by the Materiality Assessment
Governance disclosures (ESRS G1 Business Conduct) include transparency about policies, risk management, and ethical business practices. The materiality assessment determines the necessary governance disclosures based on entity-specific risks and opportunities.
✅ (D) is correct Conclusion:
The sustainability statement must include general disclosure requirements (A), environmental objectives under the EU Taxonomy (B), and governance-related information based on materiality (D). Financial performance metrics from IFRS reports (C) are not required.
Official
Reference: Commission Delegated Regulation (EU) 2023/2772 Compilation Explanations January – July 2024
A, D B
Explanation:
The sustainability statement under ESRS is structured according to ESRS 1 and ESRS 2, outlining specific disclosure requirements. The required disclosures include: General Disclosure Requirements from ESRS 2
ESRS 2 outlines general disclosure requirements, including governance, strategy, and impact, risk, and opportunity management (IROs). These disclosures are mandatory for all undertakings, providing the foundation of the sustainability statement.
✅ (A) is correct
Environmental Objectives under the EU Taxonomy Regulation
Companies must disclose their alignment with the EU Taxonomy Regulation, particularly under Article 8 of Regulation (EU) 2020/852, which includes financial and non-financial companies’ obligations regarding taxonomy-aligned activities.
✅ (B) is correct
Financial Performance Metrics from IFRS Reports
Financial metrics from IFRS are NOT a required disclosure under ESRS. The sustainability statement focuses on non-financial reporting, while financial performance remains under IFRS standards in financial statements.
❌ (C) is incorrect
Governance-Related Information Determined by the Materiality Assessment
Governance disclosures (ESRS G1 Business Conduct) include transparency about policies, risk management, and ethical business practices. The materiality assessment determines the necessary governance disclosures based on entity-specific risks and opportunities.
✅ (D) is correct Conclusion:
The sustainability statement must include general disclosure requirements (A), environmental objectives under the EU Taxonomy (B), and governance-related information based on materiality (D). Financial performance metrics from IFRS reports (C) are not required.
Official
Reference: Commission Delegated Regulation (EU) 2023/2772 Compilation Explanations January – July 2024
Question #4
Which of the following are key steps in preparing to develop an ESRS report? Select all that apply.
- A . Setting up internal controls and stakeholder engagement processes.
- B . Preparing for materiality assessment.
- C . Disregarding stakeholder opinions.
- D . Benchmarking and gap analysis.
- E . Focusing solely on financial data collection.
- F . Planning for external assurance.
Correct Answer: A, B, D, F
A, B, D, F
Explanation:
Preparing an ESRS report involves multiple key steps to ensure compliance with CSRD requirements.
Below is an evaluation of each option:
A, B, D, F
Explanation:
Preparing an ESRS report involves multiple key steps to ensure compliance with CSRD requirements.
Below is an evaluation of each option:
Question #5
What is the PRIMARY purpose of creating a cross-departmental taskforce for CSRD compliance?
- A . To create a hierarchical structure that limits communication between departments
- B . To ensure coordinated efforts, meet reporting timelines, and manage sustainability reporting responsibilities across the organization
- C . To reduce the overall workload by assigning all tasks to a single department
- D . To minimize interaction between different organizational departments
Correct Answer: B
B
Explanation:
A cross-departmental taskforce is crucial for Corporate Sustainability Reporting Directive (CSRD) compliance as it enables an organization to coordinate sustainability reporting efforts effectively. Key responsibilities of the taskforce include:
Ensuring alignment across departments (e.g., Finance, Compliance, Legal, ESG, and Operations) to gather accurate sustainability data.
Meeting reporting timelines required under ESRS and CSRD regulations.
Managing responsibilities across teams to ensure sustainability disclosures are consistent with financial reporting controls.
Enhancing cross-functional collaboration for double materiality assessment and ensuring compliance
with assurance and audit requirements.
Incorrect Answers:
B
Explanation:
A cross-departmental taskforce is crucial for Corporate Sustainability Reporting Directive (CSRD) compliance as it enables an organization to coordinate sustainability reporting efforts effectively. Key responsibilities of the taskforce include:
Ensuring alignment across departments (e.g., Finance, Compliance, Legal, ESG, and Operations) to gather accurate sustainability data.
Meeting reporting timelines required under ESRS and CSRD regulations.
Managing responsibilities across teams to ensure sustainability disclosures are consistent with financial reporting controls.
Enhancing cross-functional collaboration for double materiality assessment and ensuring compliance
with assurance and audit requirements.
Incorrect Answers:
Question #6
Indicate whether the following statement is true or false. Entity-specific disclosures are required if a material sustainability matter is not covered or sufficiently detailed in the ESRS.
- A . True
- B . False
Correct Answer: A
A
Explanation:
Entity-specific disclosures are required if a material sustainability matter is not covered or sufficiently detailed in the ESRS. According to ESRS 1, paragraph 11, if an undertaking identifies an impact, risk, or opportunity that is not adequately covered by an ESRS but is material due to its specific facts and circumstances, it must provide additional entity-specific disclosures. This ensures that users of sustainability reports receive relevant and complete information.
Key Provisions from ESRS:
ESRS 1, paragraph 11:
Requires entity-specific disclosures when material sustainability matters are missing or not sufficiently covered in the ESRS.
ESRS 1, paragraph 30:
Mandates that companies must disclose additional entity-specific disclosures if material matters are not covered with sufficient granularity in ESRS.
ESRS 1, Appendix A (Application Requirements):
Provides further guidance on entity-specific disclosures, ensuring consistency and comparability while allowing companies to disclose material matters not addressed by ESRS. ESRS 2, Disclosure Requirements (SBM-3, IRO-1, GOV-1 to GOV-5):
Outlines the minimum disclosure requirements that apply when companies make entity-specific disclosures related to governance, strategy, impacts, risks, and opportunity management.
Thus, if a sustainability matter is deemed material and is not sufficiently addressed by ESRS, entity-specific disclosures are mandatory.
Official
Reference: Commission Delegated Regulation (EU) 2023/2772, ESRS 1, Paragraphs 11 and 30.
ESRS Implementation Q&A Platform C Compilation of Explanations January C November 2024.
A
Explanation:
Entity-specific disclosures are required if a material sustainability matter is not covered or sufficiently detailed in the ESRS. According to ESRS 1, paragraph 11, if an undertaking identifies an impact, risk, or opportunity that is not adequately covered by an ESRS but is material due to its specific facts and circumstances, it must provide additional entity-specific disclosures. This ensures that users of sustainability reports receive relevant and complete information.
Key Provisions from ESRS:
ESRS 1, paragraph 11:
Requires entity-specific disclosures when material sustainability matters are missing or not sufficiently covered in the ESRS.
ESRS 1, paragraph 30:
Mandates that companies must disclose additional entity-specific disclosures if material matters are not covered with sufficient granularity in ESRS.
ESRS 1, Appendix A (Application Requirements):
Provides further guidance on entity-specific disclosures, ensuring consistency and comparability while allowing companies to disclose material matters not addressed by ESRS. ESRS 2, Disclosure Requirements (SBM-3, IRO-1, GOV-1 to GOV-5):
Outlines the minimum disclosure requirements that apply when companies make entity-specific disclosures related to governance, strategy, impacts, risks, and opportunity management.
Thus, if a sustainability matter is deemed material and is not sufficiently addressed by ESRS, entity-specific disclosures are mandatory.
Official
Reference: Commission Delegated Regulation (EU) 2023/2772, ESRS 1, Paragraphs 11 and 30.
ESRS Implementation Q&A Platform C Compilation of Explanations January C November 2024.
Question #7
Which internal department is primarily responsible for providing information on building energy use and the environmental performance of physical infrastructure?
- A . Operations
- B . Facilities Management
- C . R&D and Product Development
- D . Legal and Compliance
Correct Answer: B
B
Explanation:
The Facilities Management (FM) department is primarily responsible for providing information on building energy use and the environmental performance of physical infrastructure. Key responsibilities include:
Energy management: Tracking energy consumption and implementing efficiency measures. Sustainability initiatives: Managing green building certifications, renewable energy installations, and environmental compliance.
Infrastructure monitoring: Overseeing heating, ventilation, and air conditioning (HVAC) systems, lighting efficiency, and water usage.
While the Operations department may use energy-related data for broader business functions, Facilities Management specializes in monitoring and improving building performance from an environmental perspective.
Official
Reference: ESRS E1 C Climate Change, Disclosure Requirement E1-5 – Specifies requirements for energy consumption and environmental impacts of buildings.
EFRAG Guidance on Environmental Performance and Building Energy Use – Confirms that FM is responsible for infrastructure sustainability monitoring.
B
Explanation:
The Facilities Management (FM) department is primarily responsible for providing information on building energy use and the environmental performance of physical infrastructure. Key responsibilities include:
Energy management: Tracking energy consumption and implementing efficiency measures. Sustainability initiatives: Managing green building certifications, renewable energy installations, and environmental compliance.
Infrastructure monitoring: Overseeing heating, ventilation, and air conditioning (HVAC) systems, lighting efficiency, and water usage.
While the Operations department may use energy-related data for broader business functions, Facilities Management specializes in monitoring and improving building performance from an environmental perspective.
Official
Reference: ESRS E1 C Climate Change, Disclosure Requirement E1-5 – Specifies requirements for energy consumption and environmental impacts of buildings.
EFRAG Guidance on Environmental Performance and Building Energy Use – Confirms that FM is responsible for infrastructure sustainability monitoring.
Question #8
Which of the following is true about setting thresholds for financial materiality under the ESRS?
- A . Organizations should only use monetary thresholds, such as revenue or costs.
- B . Financial materiality thresholds are based on the likelihood of occurrence and the potential magnitude of financial effects.
- C . Reputational risks cannot be considered financially material.
- D . Thresholds should focus exclusively on the short-term time horizon.
Correct Answer: B
B
Explanation:
Under the ESRS framework, financial materiality is assessed based on a combination of: Likelihood of occurrence C The probability that a sustainability matter will have a financial impact. Potential magnitude of financial effects C The scale of the impact on financial position, performance, cash flows, access to finance, or cost of capital over short-, medium-, or long-term periods.
This is outlined in ESRS 1, which states that a sustainability matter is financially material if it could reasonably be expected to trigger material financial effects on an undertaking. Financial materiality is not limited to issues under the direct control of the company; it includes dependencies on natural, human, and social resources that could create risks or opportunities.
Why the other options are incorrect:
Option A: The ESRS framework allows for both qualitative and quantitative thresholds, not just monetary ones (e.g., revenue or costs).
Option C: Reputational risks can be financially material, as they may affect access to finance, cost of capital, or customer trust, ultimately influencing the company’s financial performance.
Option D: The financial materiality assessment is conducted for the short-, medium-, and long-term, not just the short term.
Reference: Commission Delegated Regulation (EU) 2023/2772
Compilation Explanations January – July 2024, ESRS 1 on Financial Materiality EFRAG Guidance on Double Materiality and Risk Assessments
B
Explanation:
Under the ESRS framework, financial materiality is assessed based on a combination of: Likelihood of occurrence C The probability that a sustainability matter will have a financial impact. Potential magnitude of financial effects C The scale of the impact on financial position, performance, cash flows, access to finance, or cost of capital over short-, medium-, or long-term periods.
This is outlined in ESRS 1, which states that a sustainability matter is financially material if it could reasonably be expected to trigger material financial effects on an undertaking. Financial materiality is not limited to issues under the direct control of the company; it includes dependencies on natural, human, and social resources that could create risks or opportunities.
Why the other options are incorrect:
Option A: The ESRS framework allows for both qualitative and quantitative thresholds, not just monetary ones (e.g., revenue or costs).
Option C: Reputational risks can be financially material, as they may affect access to finance, cost of capital, or customer trust, ultimately influencing the company’s financial performance.
Option D: The financial materiality assessment is conducted for the short-, medium-, and long-term, not just the short term.
Reference: Commission Delegated Regulation (EU) 2023/2772
Compilation Explanations January – July 2024, ESRS 1 on Financial Materiality EFRAG Guidance on Double Materiality and Risk Assessments
Question #9
Which of the following statements about ESRS 2 are correct? Select all that apply.
- A . ESRS 2 is a sector-agnostic, cross-cutting standard applicable to all organizations.
- B . Reporting organizations don’t have to address all disclosure requirements in ESRS 2.
- C . Certain disclosure requirements in ESRS 2 are subject to a phase-in period.
Correct Answer: A, C
A, C
Explanation:
ESRS 2 is a cross-cutting, sector-agnostic standard (Option A) ESRS 2 applies to all undertakings, regardless of sector or industry.
It establishes general disclosures that cover governance, strategy, materiality, risks, and sustainability metrics.
Certain ESRS 2 disclosure requirements are subject to a phase-in period (Option C)
Some disclosure requirements have been phased in for companies with fewer than 750 employees, allowing gradual adoption.
For instance, disclosures related to biodiversity (ESRS E4), workforce (ESRS S1-S4), and pollution (ESRS E2) can be omitted for the first 1-2 years, depending on company size.
Incorrect Answer
B. Reporting organizations don’t have to address all disclosure requirements in ESRS 2
This is incorrect because ESRS 2 disclosures are mandatory for all reporting organizations. Only topical ESRS requirements depend on materiality assessments.
Official
Reference: Commission Delegated Regulation (EU) 2023/2772, ESRS 2 – Defines ESRS 2 as a sector-agnostic, cross-cutting standard.
EFRAG Compilation Explanations (JanuaryCJuly 2024), Appendix C – Lists ESRS 2 disclosures with phase-in provisions.
A, C
Explanation:
ESRS 2 is a cross-cutting, sector-agnostic standard (Option A) ESRS 2 applies to all undertakings, regardless of sector or industry.
It establishes general disclosures that cover governance, strategy, materiality, risks, and sustainability metrics.
Certain ESRS 2 disclosure requirements are subject to a phase-in period (Option C)
Some disclosure requirements have been phased in for companies with fewer than 750 employees, allowing gradual adoption.
For instance, disclosures related to biodiversity (ESRS E4), workforce (ESRS S1-S4), and pollution (ESRS E2) can be omitted for the first 1-2 years, depending on company size.
Incorrect Answer
B. Reporting organizations don’t have to address all disclosure requirements in ESRS 2
This is incorrect because ESRS 2 disclosures are mandatory for all reporting organizations. Only topical ESRS requirements depend on materiality assessments.
Official
Reference: Commission Delegated Regulation (EU) 2023/2772, ESRS 2 – Defines ESRS 2 as a sector-agnostic, cross-cutting standard.
EFRAG Compilation Explanations (JanuaryCJuly 2024), Appendix C – Lists ESRS 2 disclosures with phase-in provisions.
Question #10
Which of the following are key characteristics of an internal control for assurance purposes? Select all that apply.
- A . The activity must be documented and implemented according to the agreed timing.
- B . The activity can be carried out by the same staff who collected, calculated, or consolidated the information.
- C . The activity must be able to be ‘tested’ by the external assurance provider.
- D . The results of the activity do not need to be documented each time it is performed.
Correct Answer: A, C
A, C
Explanation:
2023/2772, various EFRAG guidance documents, and reports related to CSRD, ESRS, stakeholder engagement, double materiality, external assurance, and digital reporting Study guide Reference at the end of each question
Under the ESRS framework, effective internal controls for assurance purposes must meet key characteristics to ensure reliability, traceability, and auditability. Correct Options Explained:
(A) Documentation & Implementation: Internal controls must be formally documented, implemented as per the designated schedule, and consistently applied.
(C) Testability by External Assurance Providers: Assurance providers must be able to verify the controls, test their effectiveness, and ensure compliance with CSRD assurance requirements. Incorrect Options Explained:
(B) Same Staff Performing & Assuring the Control: A fundamental principle of internal control is the separation of duties to avoid conflicts of interest. The control must be performed by one team and assured independently.
(D) No Need for Documentation: Proper documentation is mandatory for internal controls to enable traceability, testing, and regulatory compliance.
ESRS
Reference: Commission Delegated Regulation (EU) 2023/2772, GOV-5: Risk management and internal controls over sustainability reporting, highlighting the necessity of internal control mechanisms.
EFRAG Assurance Guidelines: Stipulating that documented controls must be verifiable and tested for external assurance.
A, C
Explanation:
2023/2772, various EFRAG guidance documents, and reports related to CSRD, ESRS, stakeholder engagement, double materiality, external assurance, and digital reporting Study guide Reference at the end of each question
Under the ESRS framework, effective internal controls for assurance purposes must meet key characteristics to ensure reliability, traceability, and auditability. Correct Options Explained:
(A) Documentation & Implementation: Internal controls must be formally documented, implemented as per the designated schedule, and consistently applied.
(C) Testability by External Assurance Providers: Assurance providers must be able to verify the controls, test their effectiveness, and ensure compliance with CSRD assurance requirements. Incorrect Options Explained:
(B) Same Staff Performing & Assuring the Control: A fundamental principle of internal control is the separation of duties to avoid conflicts of interest. The control must be performed by one team and assured independently.
(D) No Need for Documentation: Proper documentation is mandatory for internal controls to enable traceability, testing, and regulatory compliance.
ESRS
Reference: Commission Delegated Regulation (EU) 2023/2772, GOV-5: Risk management and internal controls over sustainability reporting, highlighting the necessity of internal control mechanisms.
EFRAG Assurance Guidelines: Stipulating that documented controls must be verifiable and tested for external assurance.