SSA-CH5

International Audit and Assurance Standards Board (IAASB); engagement; sufficient appropriate evidence; degree of confidence ; intended users;

They defined ASSURANCE as an ______ in which a practitioner aims to obtain _____ in order to express a conclusion designed to enhance the ___________ of the _______ other than responsible party about the subject matter information.

TRUE

As to the subject matter info. in Financial Report Audit it is a WHOLE report. T/F

FALSE: Sustainability Report Audit

As to subject matter info. in Financial Report Audit the WHOLE OR SPECIFIC part of the report agreed with the client. T/F

Financial Report Audit

Under relevant frameworks/requirements the relevant laws and accounting standard is normally very specific.

Sustainability Report Audit

Under relevant frameworks/requirements it is specific regulations/ contracts or voluntarily adopted by the client.

FALSE: Financial Report Audit

Sustainability Report Audit is based on accounting standard requirements. T/F

TRUE

Sustainability Report Audit is defined in sustainability reporting framework used or other applicable requirements. T/F

FALSE: Reasonable assurance only

Level of assurance provided to users under Financial Report Audit is both reasonable and limited assurance. T/F

TRUE

Sustainability Assurance is a special form of non-financial assurance. T/F

AccountAbility AA1000 Assurance Standard (AA1000 AS)

Assurance is an evaluation method that uses a specified set of principles and standards to assess the quality of reporting org. subject matter,

AccountAbility- What assures? (2006)

Assurance was defined broadly in terms of its outcome: as enabling the confidence of a party or group of people that the info is accurate and complete enough

1. Level of Assurance

2. Scope of the Engagement

3. The use of multi-disciplinary team

4. Independence of the Auditors is Important

What are the main characteristics of a sustainability assurance engagement?

Reasonable assurance

When reporting systems are weak, the costs for obtaining __________ can be considerable.

FALSE: limited LOA is less extensive than reasonable LOA

Limited level of assurance are MORE extensive than those performed to obtain a reasonable level of assurance. T/F

REVIEW

When limited assurance is provided the engagement is referred to as _______.

AUDIT

When reasonable assurance is provided the engagement is referred to as ______.

1. External stakeholders demand for credible sustainability reports

2. Organization's size , listing status and industry membership

3. Media Pressure

4. Characteristics of country-of-origin level drivers (mixed results)

What are the factors driving demand for sustainability assurance in EXTERNAL?

1. Financial Indicator

2. Value addition from sustainability

What are the factors driving demand for sustainability assurance in INTERNAL?

1. High cost of sustainability assurance

2. Sustainability assurance does not add value

3. Sustainability assurance too onerous

4. Lack of external regulatory pressure

5. Sustainability assurance increases exposure to litigation

6. Viable substitute available

What are the factors inhibiting the demand for sustainability assurance ?

Accounting Sustainability Assurance Providers (ASAPs)

Represent the big four accounting firm which entered the market to supplement their primary financial audit work.

Non-Accounting Sustainability Assurance Providers (NASAPs)

It constitute three main sub-groups of global engineering and certification providers, smaller local sustainability consultancies and other practitioner.

ASAPs

With there experience in financial audit, they have competencies necessary to undertake sustainability reporting audits, they also have better understanding of the organization and its industry.

FALSE: ENCOURAGE

Assurance practitioner are DISCOURAGE to experiment with new standard and find more suitable approaches. T/F

NASAPS

They have expertise in knowledge of sustainability

FALSE: Large Accounting Firm

Small accounting firms can leverage their size to achieve economies of scale and offer services at lower costs and fees. T/F

True

Accountants have access to a larger pool of resources for developing new or improving existing audit and assurance. T/F

ASAPs

They are less dependent on any one client and they must follow the ethical codes requiring independence and objectivity.

NASAPs

They are not dependent on a single source of revenue and have in place quality control measures.

ASAP

Internal Stakeholders preferred to choose accounting firm as they believed that sustainability assurance was essentially an extension of financial statements

NASAPs

External Stakeholder prefer them, who were seen to be more competent in the subject matter of assurance and independent than accountants

FALSE; ASAP

NASAPs more comfortable assuring hard quantitative data. T/F

True

NASAPs is comfortable in providing assurance over soft qualitative data. T/F

Accountants; Non-accountants

_________ are focused more on verifying the reliability of the content of sustainability reports; while ________ provides assurance over the entire sustainability report (overall balance of the sustainability).

ASAPs

They adopt ISAE3000 and adopt more cautionary approach focusing on verifying the accuracy/reliability of of the content of sustainability reports.

NASAPs

They are NOT bound by any standards but most prefer AA1000AS, they are more willing to innovate and adopt creative assurance methodologies to achieve their objectives.

ISAE3000

It is the accounting profession's preferred sustainability assurance standard, a part of suit of ISAs issued by IAASB, which guide financial auditors.

ISAE3000

It is a generic standard for any assurance engagement other than audits or reviews of historic financial information.

AA1000AS

it is designed for assuring the quality of an organization's sustainability reporting and the processes, systems and competencies which underlie the full range of organizational performance.

multi-stakeholder process

AA1000AS was develop through a ____________ led by AccountAbility.

Type 1 engagements

It is a narrow in scope and focus on assessing an organization's adherence to the AA1000APS sustainability principles of inclusivity, materiality and responsiveness.

Type 2 engagements

Those are broader in scope and involve SAPS evaluating both the reporter's application of foundation principles and the reliability of the sustainability reports.