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ACCA Strategic Professional · Advanced Audit and Assurance (International) · The assurance of sustainability

Brightwater Co wants assurance on its integrated report, which includes forward-looking statements about expected carbon reductions by 2035 and its business model description. The engagement partner at Ashby LLP is considering the nature of the subject matter. Which statement is most appropriate regarding the assurance engagement?

The auditor can evaluate the reasonableness of the assumptions and whether the forward-looking information is properly prepared on the stated basis, but cannot give assurance that the projected outcomes will actually be achieved. Prospective information is not excluded from assurance under ISAE 3000, though the report must reflect its inherent uncertainty.

  1. AForward-looking information cannot be subject to any assurance under ISAE 3000 (Revised)
  2. BThe auditor should treat the forward-looking statements as historical facts and test them to actual outcomes
  3. CThe auditor can assess the assumptions and the basis of preparation, but cannot give assurance that the forecast outcomes will be achievedCorrect
  4. DThe auditor should only report on the qualitative narrative and exclude any quantitative data

Explanation

ISAE 3000 (Revised) permits assurance on prospective information, where the practitioner evaluates whether assumptions are reasonable and the information is properly prepared. The practitioner cannot guarantee that future results will occur. Forward-looking data is not out of scope, and it must not be treated as historical.

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