ACCA Strategic Professional · Advanced Audit and Assurance (International) · Developments in sustainability assurance

Lindqvist Energy has asked Baxter & Co for limited assurance on its sustainability report. During planning, the engagement team plans procedures that focus mainly on analytical procedures and enquiries. The engagement leader argues that no work on the entity's internal control is needed at all. Under ISSA 5000, which response is most appropriate?

The leader is wrong. Even in a limited assurance engagement, ISSA 5000 requires the practitioner to understand the entity, its environment and relevant internal control to identify where material misstatements are likely to arise, though the work is less extensive than for reasonable assurance.

1. AAgree, because limited assurance never requires any understanding of the entity's system of internal control
2. BDisagree entirely, because limited assurance requires the same evidence as reasonable assurance, including tests of operating effectiveness of all controls
3. CAgree, because ISSA 5000 applies only to reasonable assurance engagements
4. DDisagree, because the practitioner must still obtain an understanding of the entity and its environment, including the system of internal control relevant to the engagement, to identify where material misstatements are likely to ariseCorrect