ESG Factors and Their Representation in Tax Reporting: Challenges for Audit

Abstract

The article explores current trends in the integration of ESG factors (environmental, social, and governance aspects) into the corporate tax reporting system. The focus is placed on analyzing the challenges faced by auditors when verifying indicators related to environmental impact, social responsibility, and transparency in corporate governance. The study outlines the lack of standardized requirements for reflecting ESG indicators in tax reporting, which complicates the audit process and reduces the level of transparency for regulatory authorities. At the same time, it emphasizes the growing importance of non-financial information in building fiscal trust, investment attractiveness, and the reputational capital of companies.

The purpose of the study is to identify potential approaches to reflecting ESG factors in tax reporting and to define auditor requirements under the conditions of transformation of financial and non-financial information. The article applies comparative analysis, content analysis of corporate reporting, and expert evaluation of risks related to inaccurate information disclosure. Special attention is paid to international practices (GRI, TCFD, CSRD) concerning ESG data disclosure and its relation to taxation. The specifics of developing new types of indicators for tax authorities, auditing bodies, and users of integrated reporting are also considered.

The results of the study indicate the need to legally establish certain ESG-reporting elements within tax declarations and to develop audit criteria for such data.
Conclusions. Directions for improving the quality of ESG-related audit procedures are proposed, including the revision of audit standards, implementation of interdisciplinary approaches, and enhancement of auditors' professional qualifications. It is emphasized that the integration of ESG factors into tax reporting will not only enhance business accountability but also serve as an important tool for tax compliance, risk management, and strategic planning in response to increasing demands for sustainability and transparency from regulators, investors, and society.