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

Marlowe LLP is the statutory auditor of Teso Co and has been asked to provide limited assurance on Teso's sustainability report. During planning, the team finds that Teso's carbon data is collected by many subsidiaries using inconsistent spreadsheets, and a key GHG emission factor comes from an external expert engaged by management. Which approach best reflects the practitioner's responsibilities?

The practitioner should evaluate the management expert's competence, capabilities and objectivity, understand their work and assess whether it is appropriate evidence, while also responding to the risks arising from inconsistent data collection across subsidiaries. Blind reliance on the expert, disclaiming the factor, or substituting a financial audit would not meet ISAE 3000 requirements.

  1. ARely fully on the management's expert because the expert is independent of the practitioner
  2. BEvaluate the expert's competence, capabilities and objectivity, understand their work, and evaluate the appropriateness of that work as evidence, while also considering the control weaknesses in data collectionCorrect
  3. CDisclaim responsibility for the emission factor in the assurance report because it was supplied externally
  4. DReplace the engagement with a financial statement audit procedure, since the auditor already audits Teso

Explanation

ISAE 3000 (Revised) requires the practitioner to evaluate a management's expert's competence, capabilities and objectivity, understand their work, and judge the adequacy of that work as evidence. The inconsistent spreadsheets also raise risks of material misstatement that the procedures must address even in limited assurance. Full reliance on the expert or disclaiming responsibility are inappropriate, and a financial statement audit is a different engagement.

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