Auditor’s Guide to IFRS Disclosures
Why IFRS matters
The purpose of IFRS is consistency. Regulators, investors, and stakeholders can look at a set of IFRS-compliant financial statements and evaluate performance without navigating local accounting quirks. This comparability fuels trust in capital markets and supports global investment.
The burden of disclosure requirements
Standards are detailed, frequently updated, and layered with industry-specific rules. For auditors, this complexity comes to life in the disclosure requirements.
Disclosures provide the narrative behind the numbers: explaining policies, highlighting management judgments, outlining risk exposures, and revealing related-party transactions. A missed or incomplete disclosure isn’t a small oversight - it can trigger regulatory questions, damage credibility, or even result in penalties
The challenges of IFRS disclosures
Every audit team knows disclosures take disproportionate time and energy. The challenges typically fall into four categories:
- Volume and complexity: IFRS includes dozens of standards, each with its own disclosure requirements. For industries like banking, insurance, and energy, the requirements are especially intricate. Leases are a good example. IFRS 16 introduced new recognition for operational lease and disclosure requirements that reshaped financial reporting across industries.
- Manual work: Traditional disclosure checklists rely on auditors to manually tick through items, gather evidence, and cross-reference supporting documents. This process is repetitive and highly prone to human error.
- Time pressure: Year-end cycles compress disclosure work into already packed audit timelines. Reviewers have little room to catch up if something is missed.
- Risk factor: Regulators, audit committees, and external stakeholders pay close attention to disclosures. Even one omission can draw scrutiny and compromise confidence in the audit opinion.
Taken together, these challenges explain why disclosure reviews are often cited as one of the most resource-intensive elements of an audit.
Best practices for managing disclosures
While disclosure work is demanding, strong processes can reduce risk and save time. Firms that excel at managing IFRS disclosures usually adopt a few consistent practices:
- Keep checklists current. IFRS is updated regularly through the IASB’s agenda decisions and new pronouncements. Teams should maintain central, up-to-date disclosure checklists rather than relying on outdated templates.
- Assign accountability. Clear ownership avoids overlap and missed items. Senior team members should review disclosures, while juniors handle evidence gathering.
- Capture evidence consistently. For each checklist item, document whether the disclosure applies, how it was addressed, and where supporting evidence can be found. This creates a transparent trail for reviewers and regulators.
- Leverage technology. Manual checklists are slow. Digital tools standardize reviews, reduce duplication, and streamline evidence capture, making it easier for auditors to meet deadlines without cutting corners.
How AI is changing disclosure reviews
Traditional checklists help, but they remain static. They tell auditors what to check, not how to work through it. AI is changing that dynamic.
- Guide auditors through disclosure checklists by surfacing relevant requirements in context.
- Ensure completeness by cross-referencing standards against the disclosures included.
- Capture evidence in real time, creating a stronger audit trail without extra manual steps.
How Disclosure Agents simplify disclosure reviews
The idea behind Disclosure Agents is simple: disclosure reviews should feel guided, not overwhelming. Instead of static checklists that demand constant manual effort, Disclosure Agents introduce structure and intelligence into the process. They walk teams through requirements, highlight what’s missing, and connect each disclosure directly to evidence as the review unfolds.
- Reduce risk: Every requirement is accounted for, with clear evidence attached.
- Work smarter: AI suggestions give junior team members a bigger role, while senior auditors stay focused on oversight and judgment.
- Save time: What used to take hours can now be done in minutes, leaving more room for analysis and client conversations.
“We’re launching a new agent for disclosures. Auditors have to answer hundreds of questions, which exposes them to compliance risks and is error-prone. It takes hours or days. Our AI agent will take the first pass, allowing auditors to act as reviewers rather than manual doers” – Vidya Peters, CEO DataSnipper
Auditors need smarter ways to tackle disclosure compliance
Disclosure Agents is one answer, but the bigger picture is: AI can reduce risk and free up time for higher-value audit work.
IFRS disclosures are complex by design, and that complexity isn’t going away. What can change is how audit teams manage the workload.
With AI-driven tools like Disclosure Agents, firms can reduce risk, improve efficiency, and free up capacity for areas of the audit that demand professional judgment. Smarter workflows mean stronger compliance - and fewer sleepless nights during year-end.
Frequently Asked Questions (FAQ)
What are the biggest challenges in IFRS disclosure reviews?
The main challenges are:
- The volume and complexity of standards (with updates every year).
- The manual work of checklist reviews and evidence gathering.
- Time pressure during year-end cycles.
- The risk of regulatory scrutiny if even a single disclosure is missed.
How do auditors usually manage disclosure checklists?
Traditionally, auditors use spreadsheets or Word-based checklists to track hundreds of disclosure requirements. While this provides structure, the process is repetitive, prone to human error, and difficult to scale across teams or large engagements.
How is AI changing IFRS disclosure reviews?
AI can guide auditors through checklists by surfacing relevant requirements in context, cross-referencing disclosures against standards, and capturing evidence in real time. This reduces manual work, strengthens audit trails, and allows teams to focus on oversight and analysis instead of repetitive tasks.
What are DataSnipper Disclosure Agents?
Disclosure Agents are part of the DataSnipper Financial Statement Suite, developed in partnership with Microsoft. They use Agentic AI to automate disclosure checklist reviews, link requirements to transparent evidence, and guide teams step by step through the process. The result is faster reviews, reduced compliance risk, and workflows that scale across junior and senior staff.
How does the Microsoft and DataSnipper partnership improve Disclosure Agents?
By building directly into Microsoft Excel, Disclosure Agents bring AI into the environment audit and finance teams already use every day. Powered by Microsoft Azure, this ensures enterprise-grade security and scalability. Users can interact with Disclosure Agents in natural language, making disclosure reviews easier, more accurate, and faster.
