ACCA Strategic Professional · Advanced Audit and Assurance (International) · Other current issues
Harrow & Pike is engaged to provide assurance on Calder plc's sustainability report. Calder's report claims that it is 'on track to be carbon neutral by 2030' and cites internal targets, but gives no evidence of the plans, investments or assumptions underlying this. The assurance team suspects greenwashing. Which is the most appropriate action for the practitioner?
The practitioner should assess whether the carbon neutral claim rests on reasonable assumptions and is consistent with other information, and consider the effect on the conclusion if it is misleading. Management approval alone is not evidence, and a suspected greenwashing claim cannot simply be ignored or left unreported.
- AEvaluate whether the forward-looking claim is supported by reasonable assumptions and consistent with other information, and consider the effect on the conclusion if it is misleadingCorrect
- BIgnore the claim because forward-looking statements are always outside the scope of assurance
- CAccept the claim because management has approved the targets
- DIssue a clean conclusion and mention the concern only in the engagement letter
Explanation
The practitioner should obtain evidence on whether the claim has a reasonable basis and is consistent with other information, and if it is misleading, consider modifying the conclusion or other reporting. Management approval is not evidence, and forward-looking information is not automatically excluded where it falls within the scope or is other information.
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