ACCA Strategic Professional · Strategic Business Leader · Reporting to stakeholders
Brevik Foods engages an independent firm to review its sustainability report. The firm checks the data collection systems, tests a sample of the reported emissions figures, and concludes that the figures are fairly stated, while also commenting on whether Brevik has identified and responded to its key stakeholders' concerns. Which feature of this engagement is most characteristic of a social and environmental audit as opposed to a financial statement audit?
The distinctive feature is that the review extends to non-financial performance and how well the company responds to stakeholder concerns. Sampling, independence and concluding on reliability are shared with ordinary financial audits, so they do not distinguish the social and environmental audit.
- AThe review covers non-financial performance and stakeholder responsiveness, not only numerical accuracyCorrect
- BThe firm tests samples of reported data
- CThe firm gives a conclusion on the reliability of figures
- DThe firm is independent of management
Explanation
Sampling, concluding on reliability and independence are common to all assurance work, including financial audits. The distinctive element here is the scope: non-financial performance and the company's responsiveness to stakeholders, which is typical of social and environmental audit.
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