On 4 April 2025, the European Securities and Markets Authority (ESMA) published a report on the enforcement and regulatory activities of financial reporting enforcers within the European Union in 2024.
ESMA is an independent EU authority established on 1 January 2011. Its mission is to enhance investor protection and promote stable and well-functioning financial markets in the European Union (EU).
ESMA and the EU’s financial reporting enforcers regularly assess the compliance of financial and non-financial information provided by issuers listed on regulated markets with the applicable financial reporting framework (IFRS accounting standards).
At the end of 2024, approximately 3,900 issuers preparing IFRS financial statements were admitted to trading on a regulated market in the EU, of which around 3,250 prepared IFRS consolidated financial statements and around 650 prepared only IFRS non-consolidated financial statements. In the Czech Republic, there were 78 issuers in 2024, of which 27 prepared IFRS consolidated financial statements and 51 prepared IFRS non-consolidated financial statements.
In 2024, the European enforcers examined the financial statements of approximately 685 issuers, which corresponds to an average examination rate of 17% of all IFRS issuers with securities listed on regulated markets.
These examinations resulted in 253 actions to address material departures from IFRS, representing an action rate of 38%. Approximately 34% of all actions taken in 2024 related to issues regarding recognition, measurement and/or presentation, while 66% of all actions related only to disclosure issues. Similar to 2023, in around 14% of the actions taken, the enforcers required issuers to make immediate disclosure to the market by reissuing the financial statements or publishing a corrective note. For the remaining 86% of the actions taken, enforcers considered that a correction in the future financial statements was sufficient.
The main deficiencies were identified in four areas, namely financial instruments, impairment testing of non-financial assets, presentation of financial statements and operating segments. Notably, there were more findings in the area of cash flow statements and intangible assets in 2024.
Enforcers also assessed the non-financial information for 425 issuers, covering approximately 19% of the total estimated number of issuers required to publish a non-financial statement, resulting in 125 enforcement actions. Almost half of these enforcement actions were about disclosures under Article 8 of the EU Taxonomy Regulation.
The report also covers reporting in the European Single Electronic Format (ESEF), with 222 total actions based on the examination of 3,103 filings. The breaches in this area mostly concerned the entire annual financial report not being in XHMTL or the late publication of the ESEF annual financial report.
The ESMA Report on 2024 Corporate reporting enforcement and regulatory activities is available on the ESMA website.
In our view, the ESMA report indirectly highlights that preparing financial statements in compliance with IFRS can be a complex task. At Deloitte, our team of experienced IFRS specialists is here to help you simplify the process efficiently and effectively. If you are interested in advisory services related to the IFRS accounting and financial reporting, please contact Tomáš Kachlík, Head of the Accounting Advisory function.
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