Expanding the Concept of Materiality-to ESG: Audit Issues and Implications

The concept of materiality has long been a basic feature in the US securities laws and regulations. With current global efforts to develop new disclosure standards for Environmental, Social, Governance (ESG), debate emerged regarding expansion definition materiality. An expanded would include not only financial (i.e., how information affects an investor’s decision buy or sell), but it also environmental social company’s operations impact climate, its employees, consumers, society). This is referred as “double materiality” (EU 2019). However, discussed this paper, set forth court decisions are contrary double paper provides brief history materiality, concept, discusses audit issues implications.