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

Marlow Energy applies a sustainability framework that requires disclosure of both how sustainability matters affect the company's value and how the company's activities affect people and the environment. The engagement partner at the audit firm is planning a sustainability assurance engagement. Which concept does this reporting basis reflect, and what is the key consequence for the assurance practitioner?

This is double materiality. Because the framework covers both financial effects on the entity and the entity's impacts on people and the environment, the practitioner must evaluate whether the entity's materiality assessment process properly considers both perspectives, rather than reusing the financial statement materiality figure.

1. ASingle materiality; the practitioner only considers information affecting investors' financial decisions
2. BDouble materiality; the practitioner must consider the entity's process for identifying material matters from both financial and impact perspectivesCorrect
3. CStatutory materiality; the practitioner applies the financial statement materiality figure to all sustainability information
4. DPerformance materiality; the practitioner sets a threshold lower than the reporting threshold for every metric