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

Karamel Energy asks Dunmore & Co to give assurance on its sustainability report. While planning, the engagement partner notes that the report includes both energy intensity metrics and forward-looking climate targets. Which approach is most consistent with ISSA 5000 on materiality?

Materiality should cover both quantitative and qualitative information and reflect the decisions intended users make from the sustainability report, including the nature and context of disclosures. It is a matter for the practitioner's judgement, not simply borrowed from the financial statements or set by management.

  1. AMateriality is determined only for quantitative metrics, and qualitative disclosures are excluded from consideration
  2. BMateriality is set by reference to the entity's financial statement materiality, with no further consideration
  3. CMateriality is applied to both quantitative and qualitative information, considering the information needs of the intended users and the nature and context of the disclosuresCorrect
  4. DMateriality is determined by the entity's management and is not a matter for the practitioner's judgement

Explanation

The practitioner uses professional judgement, considering what would influence the decisions of intended users, and addresses qualitative as well as quantitative aspects. Simply importing financial statement materiality ignores that users and subject matter differ. Management does not decide the practitioner's materiality.

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