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

During a limited assurance engagement under ISSA 5000 on Calder Mining's sustainability report, the practitioner finds that management has not disclosed a material omission: safety incident data for one subsidiary were left out of the reported total. Management refuses to correct it. The omission is material but not pervasive. What is the appropriate form of conclusion?

A qualified conclusion is appropriate because the uncorrected omission is material but not pervasive. The practitioner states that, except for the omission, nothing indicates material misstatement. Adverse is for pervasive effects, a disclaimer is for evidence limitations, and emphasis paragraphs cannot replace modification.

  1. AAn unmodified conclusion with an emphasis of matter paragraph
  2. BA qualified conclusion, stating that except for the effect of the omission, nothing has come to the practitioner's attention indicating the information is materially misstatedCorrect
  3. CA disclaimer of conclusion because management refused to correct
  4. DAn adverse conclusion, as any uncorrected misstatement requires it

Explanation

A material but not pervasive misstatement leads to a qualified conclusion ('except for'). An adverse conclusion is for pervasive misstatement, and a disclaimer applies to inability to obtain evidence. An emphasis paragraph cannot substitute for modifying the conclusion.

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