ACCA Applied Knowledge · Business and Technology · Sustainable business practices
A company has its sustainability report checked by an independent firm, which gives an opinion on whether the reported data are reliable. What is the main benefit of this assurance for stakeholders?
Independent assurance increases the credibility of the reported information. It gives stakeholders confidence that the data are reliable and fairly presented. It does not guarantee good performance, and it does not remove the need for the company to set and monitor sustainability targets.
- AIt guarantees that the company's environmental performance is good
- BIt increases the credibility of the reported informationCorrect
- CIt removes the need for the company to set sustainability targets
Explanation
Assurance addresses the reliability of the information, not the quality of the performance itself, so a poor performer can still receive a clean opinion on accurate data. It also does not replace targets. Its benefit is to increase stakeholder confidence in the reported data.
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