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CA Final · Advanced Auditing, Assurance and Professional Ethics · Sustainable Development Goals (SDG) & Environment, Social and Governance (ESG) Assurance

CA Isha is the assurance practitioner for Surya Power Ltd's sustainability report. During the engagement, management refuses to give access to the third-party records supporting its renewable energy generation claims, citing confidentiality. The claim is material and pervasive to the report. Which is the most appropriate action?

She should modify her conclusion. Because the missing evidence is both material and pervasive, she should disclaim a conclusion or withdraw from the engagement where possible. A management representation or emphasis paragraph cannot replace sufficient appropriate evidence that management has refused to provide.

  1. AIssue an unmodified conclusion with an emphasis of matter paragraph on the confidentiality
  2. BRely on the management representation letter as sufficient evidence and proceed
  3. CExpress a modified conclusion, and where the limitation is material and pervasive, disclaim a conclusion or withdraw if possibleCorrect
  4. DReplace the claim with her own estimate and report on it as audited

Explanation

A scope limitation preventing sufficient appropriate evidence requires a qualified conclusion or, if material and pervasive, a disclaimer or withdrawal. Representations cannot substitute for evidence that should exist, and an emphasis paragraph does not cure the limitation. The practitioner must not substitute own estimates.

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