ACCA Strategic Professional · Advanced Audit and Assurance (International) · Developments in sustainability assurance

During a limited assurance engagement on Meridian Foods' sustainability report, the practitioner notes that the CFO, who also chairs the sustainability committee, has an incentive: a bonus tied to meeting a published emissions-reduction target. Reported emissions have fallen exactly to the target, but the data is compiled by a single spreadsheet maintained by the CFO's team. Which response best reflects professional scepticism and quality requirements?

The practitioner should treat the bonus incentive and reliance on one spreadsheet as a bias or misstatement risk, extend testing of the spreadsheet and underlying data, and use experienced staff. Representations alone are insufficient, and limited assurance still demands a response to identified risks.

1. AAccept the figures because limited assurance does not require consideration of bias
2. BInclude the bonus arrangement in the report as an emphasis of matter and perform no further work
3. CTreat the incentive as a risk factor for management bias, extend procedures on the spreadsheet and source data, and consider involving a more experienced team memberCorrect
4. DAsk the CFO to confirm in the representation letter that the figures are unbiased and rely on that