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ACCA Strategic Professional · Advanced Audit and Assurance (International) · The assurance of sustainability

Having completed a limited assurance engagement on Harbour plc's sustainability report, the practitioner finds that one disclosed energy metric is materially misstated, but the rest of the report is fairly stated. Management refuses to correct it. Which conclusion is most appropriate?

A qualified conclusion is appropriate because the misstatement in one energy metric is material but confined, so not pervasive. An emphasis paragraph cannot correct a misstatement, a disclaimer relates to inability to obtain evidence, and an adverse conclusion is reserved for pervasive effects.

  1. AA qualified conclusion, because the misstatement is material but not pervasiveCorrect
  2. BAn unmodified conclusion with an emphasis of matter paragraph
  3. CA disclaimer of conclusion, because evidence was unavailable
  4. DAn adverse conclusion, because any material misstatement requires it

Explanation

A material misstatement that is not pervasive leads to a qualified conclusion (except for). An emphasis paragraph cannot cure a misstatement. A disclaimer applies when evidence cannot be obtained, not when a known misstatement is uncorrected. Adverse is reserved for pervasive misstatement.

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