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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reporting on other assignments

Brightwater plc's integrated report includes a forward-looking statement that renewable energy will supply 60% of its power by 2030. Management asks the practitioner for assurance on this target as part of a limited assurance engagement. Which response is most appropriate?

The practitioner should report on whether the assumptions are reasonable and the statement is properly prepared on that basis, while making clear the target's achievement cannot be assured. Future outcomes are uncertain, so assurance on achievement is impossible, but work on assumptions and preparation is permitted.

  1. AExplain that the practitioner can report on whether the assumptions are reasonable and the statement is properly prepared on the basis of those assumptions, but cannot give assurance that the outcome will be achievedCorrect
  2. BGive an opinion that the target will be achieved, since the directors have approved the plan
  3. CDecline the engagement because ISAE 3000 prohibits any work on future-oriented information
  4. DReport only on the arithmetical accuracy of the percentage, without considering assumptions

Explanation

Assurance on prospective information focuses on whether the assumptions provide a reasonable basis and the information is properly prepared on that basis; the practitioner cannot assure that results will be achieved because future events are uncertain. ISAE 3000 does not prohibit such work, since ISAE 3400 exists for prospective financial information and similar principles apply. Giving assurance on outcomes or checking only arithmetic would be inappropriate.

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