CA Final · Advanced Auditing, Assurance and Professional Ethics · Sustainable Development Goals (SDG) & Environment, Social and Governance (ESG) Assurance
Vistara Textiles Ltd, a listed company, has engaged CA Meera to provide limited assurance on selected BRSR Core indicators. Management has asked her to give the same level of assurance as in a financial statement audit, saying the investors expect it. What is the correct position regarding the engagement?
The auditor can give reasonable assurance only if the engagement is agreed as such and sufficient appropriate evidence is gathered through extensive procedures. Otherwise she provides limited assurance with a negative-form conclusion. Management's wish for comfort cannot change the level of assurance without matching evidence.
- AShe may agree only if the engagement is re-designated as a reasonable assurance engagement and she can obtain sufficient appropriate evidence for that level; otherwise limited assurance must be reported in negative formCorrect
- BLimited assurance and reasonable assurance are the same, so she can use either wording in the report
- CShe must refuse because ESG information can never be assured by a chartered accountant
- DShe should give reasonable assurance in positive form but perform only enquiry and analytical procedures to save time
Explanation
The level of assurance determines the nature, timing and extent of procedures. Reasonable assurance needs substantially more evidence than limited assurance, and the conclusion is expressed positively, while limited assurance is expressed in negative form. Option D is wrong because enquiry and analytics alone cannot support a positive reasonable assurance conclusion.
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