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

Halden Assurance is performing a limited assurance engagement on the climate disclosures of Ventra Mining. During the engagement, the CFO offers the engagement partner a significant additional fee to advise on designing the company's emissions data collection system, which the firm would later assure. Which statement is most accurate under the IESBA Code?

Designing the emissions data system creates a self-review threat, and if it means taking on management responsibility, the firm must not provide it to an assurance client. Disclosure of the fee or using another partner does not eliminate the problem, and independence requirements apply to limited assurance too.

  1. ADesigning the system creates a self-review threat and, if it involves assuming management responsibility, the firm should not provide it to an assurance clientCorrect
  2. BProviding the design is acceptable provided the fee is disclosed in the assurance report
  3. CThe service is acceptable if a different partner within the firm performs it, as that eliminates every threat
  4. DThe service is acceptable because limited assurance engagements are exempt from independence requirements

Explanation

Designing the system that produces the subject matter creates a self-review threat, and taking on management responsibilities is prohibited. Using a different partner or disclosing the fee does not remove the threat where management responsibility is assumed. Independence requirements apply to limited assurance engagements as well as reasonable assurance.

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