A FRAMEWORK FOR “COMPLIANCE” OR “FAIR REPRESENTATION” WHEN PREPARING A SUSTAINABILITY REPORT

Abstract

The applicable sustainability reporting framework is regulated by European directives, transposed in Bulgaria through the Accounting Act. The reporting frameworks are for “compliance” and for “fair presentation”. The compliance framework requires the entity to comply with the requirements of the regulation, law, and/or framework or standards. In addition to these requirements, the fair presentation framework also requires the provision of information beyond that specifically required by the compliance framework, if necessary, to provide a more complete picture to achieve a fair presentation. In rare cases, the fair presentation framework may deviate from a requirement of the compliance framework, if necessary to achieve an overall fair presentation. This may be required when compliance with the rule would result in incomplete or inaccurate disclosures or would reduce the usefulness or relevance to stakeholders. Without the application of a fair presentation framework, the financial sustainability audit will provide only limited, rather than reasonable, assurance. The methods of analysis and synthesis, comparison and analogy are used. European directives should adopt texts regulating the application of a fair presentation framework. The amendment should be transposed into Bulgarian accounting legislation.