CA Final · Advanced Auditing, Assurance and Professional Ethics · Sustainable Development Goals (SDG) & Environment, Social and Governance (ESG) Assurance

Himalaya Power Ltd. publishes a sustainability report claiming a 30% reduction in greenhouse gas emissions. The CA firm engaged for assurance finds that the company's emission calculation relies on a spreadsheet from a third-party consultant, and that the underlying fuel-consumption data was not tested by anyone. What is the most appropriate action by the assurance practitioner?

The practitioner should evaluate the consultant's competence and objectivity, understand the work done, and test the underlying fuel-consumption data and calculations. Using a management's expert does not remove the need for sufficient appropriate evidence, and blind reliance or automatic withdrawal would both be inappropriate.

1. AAccept the consultant's spreadsheet because it is prepared by an expert, without further work
2. BEvaluate the consultant's competence and objectivity, understand their work, and obtain evidence on the fuel-consumption data and calculationsCorrect
3. CWithdraw immediately since a third-party spreadsheet makes assurance impossible
4. DReport the 30% reduction as verified, mentioning the consultant in a footnote