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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators

Himalaya Foods Ltd wants its assurance provider to rely on a documented process. The provider first assesses whether the sustainability metrics are relevant, measurable and supported by data systems before accepting the work. Which assurance concept is the provider applying?

The provider is evaluating whether the subject matter and reporting criteria are suitable. Metrics must be relevant, measurable and backed by reliable data systems for an engagement to be accepted. Capital cost, dividend policy and committee quorum are unrelated to engagement acceptance.

  1. AEvaluating the suitability of reporting criteria and subject matterCorrect
  2. BComputing the company's weighted average cost of capital
  3. CDetermining the dividend distribution policy
  4. DFixing the quorum of the audit committee

Explanation

Before accepting an assurance engagement, a practitioner checks that the subject matter is identifiable and capable of consistent measurement against suitable criteria. WACC, dividend policy and committee quorum have no bearing on this acceptance step.

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