Your ESEF file passed validation, and your auditor signed off last year. But that no longer guarantees a smooth review process.
Auditors and national competent authorities (NCAs) now apply deeper scrutiny. They want evidence of how the filing was prepared, how tagging decisions were made, and whether reporting controls hold up.
ESMA’s data shows the shift. Total examinations fell in 2025 and at the same time, enforcement activity continued to focus on the quality and depth of reviews, reflecting the resources required for detailed examinations.
Fewer reviews. Deeper ones.
Auditor vs NCA: What each ask for and where they overlap
| Auditor | NCA | |
| When | During your annual audit, before the report is published | After you file, often months later |
| What they check | How you built the file and whether your controls work | Whether your tagging and filing are correct |
| What they ask for | A process walkthrough, control evidence and version reconciliation | Answers and documents during an examination |
| Most likely outcome | More testing and more queries | A fix required in next year’s report |
| Worst case | A modified ESEF opinion in your audit report | Resubmission or a public corrective note |
Where they overlap: Both want a defensible record of how the filing was prepared, reviewed, and tagged.
What Auditors and NCAs Look for During ESEF Reviews
Your auditor and regulator review ESEF at different stages of the reporting lifecycle, but both increasingly expect clear evidence of how the filing was prepared, reviewed, and validated.
Under the Committee of European Auditing Oversight Bodies (CEAOB) guidelines, auditors assess compliance with ESEF requirements and obtain an understanding of the processes and controls used to prepare ESEF financial statements.
Without evidence those controls work, testing expands right before your deadline.
The NCA’s review often comes months after filing, with questions and document requests. Your file is on record. Your reasoning needs to be too.
Where ESEF Documentation Gaps Create Risk
Documentation gaps created under deadline pressure surface at three points, often months apart.
1. A late audit adjustment breaks alignment
Auditors must confirm your audited statements and final ESEF version match. One late change means retagging and reconciling again under pressure. That’s where errors slip in.
2. Your auditor can’t rely on your controls
If your process lives in people’s heads, your auditor can’t test it. In fewer cases, insufficient evidence or unresolved compliance issues may result in a modified ESEF conclusion in the audit report, with the reasons stated publicly.
3. Your NCA asks why you chose that element
Can your team justify every tagging decision? ESMA expects companies to use standard elements before creating extensions.
Enforcers also know where to look.
For 2025 annual reports with consolidated financial statements, ESMA’s ESEF priority is common filing errors in the statement of cash flows.
In 2025, enforcers examined the ESEF markups of 613 issuers and acted against 80 of them, a 13% action rate. That’s roughly 1 in 8 of the issuers reviewed.
What Audit-Ready ESEF Documentation Should Include
Reporting teams don’t need more documentation for the sake of documentation. They need the right evidence in the right places.
Five items cover most of what auditors and NCAs will ask for:
| Documentation Item | Who asks for it | What goes wrong without it |
| Preparation process and controls | Auditor | Controls can’t be relied on, so testing expands |
| Tagging rationale and extension decisions | Auditor and NCA | No defensible answer to “why this element” |
| Version reconciliation record | Auditor | Late changes break alignment under deadline pressure |
| Validation against the correct taxonomy | NCA | Outdated tools cause avoidable errors |
| Consistency checks between PDF and ESEF version | NCA | Mismatched versions trigger follow-up |
When these records are available, responding to auditor and regulatory inquiries becomes significantly easier.
How IRIS CARBON builds the trail into your workflow
Manual documentation gets hard when reviews, tagging and approvals sit across multiple systems.
An AI-powered disclosure management platform keeps decisions, reviews, and controls connected in one process.
- AI Auto-Tagging and Standards Alignment Check: Support consistent and defensible taxonomy selections while reducing manual effort.
- Anomaly Detection: Flags potential sign, scale, completeness, and consistency issues before they become audit findings.
- Prior-Year Alignment: Keeps tagging consistent across reporting periods and highlights changes that may require additional review.
With tagging, review and validation in one place, your team keeps the evidence trail it needs long after filing.
The objective isn’t simply to produce a compliant filing. It’s to create a filing that teams can confidently explain, defend, and support whenever questions arise.
