AUDITORS´ READINESS TO COMPLY WITH THE CSRD : Insights from the Swedish Audit Profession

In a transformative global landscape where increased demands for transparency andsustainability shape corporate accountability, the Swedish audit profession facessignificant challenges in adapting to the EU’s Corporate Sustainability Reporting Directive (CSRD). The purpose of this study is to examine how the Swedish audit profession is preparing tomeet the increased sustainability reporting assurance requirements mandated by the CSRD. The study focuses on assessing auditors ́ readiness, competence and capacity to fulfill the requirements within Sweden’s institutional setting. The audit profession inSweden is shaped by regulations in the Annual Accounts Act (Swe: Årsredovisningslag)(SFS 1995:1554), which prohibits the outsourcing of sustainability reporting assurance, thus creating additional pressure on auditors to develop in-house expertise. By examining these dynamics, the study seeks to enhance understanding of how regulatory and institutional factors shape auditors’ readiness and how the audit profession prepares for CSRD-specific sustainability assurance practices. Through a qualitative approach with semi-structured interviews, the study reveals findings indicating that the CSRD redefines auditors’ roles by mandating assurance of environmental, social, and governance (ESG) data, including the concept of double materiality. This shift requires new skills, such as managing non-financial metrics and digital tools, beyond traditional financial auditing. However, the Omnibus "Stop-the-Clock" Directive introduces delays in implementation timelines, creating regulatory uncertainty while offering additional preparation time. Swedish audit firms are responding with comprehensive training programs and interdisciplinary collaboration, integrating sustainability experts with financial auditors to address competence gaps. Larger audit firms, such as the Big Four, leverage robust internal resources, while smaller firms depend on external support from national industry organizations, highlighting potential resource disparities. Auditors enhance stakeholder confidence by delivering credible and transparent sustainability reports, ensuring legitimacy. Theoretically, the study contributes to the understanding of how regulatory uncertainty and institutional constraints influence adaptation strategies. Practically, it advocates for robust training, clear regulatory guidelines, and collaborative platforms to support compliance. Despite limitations, such as its focus on Sweden and a limited sample size, the findings highlight a proactive profession committed to credible sustainability assurance, fostering societal trust in ESG commitments.