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ACCA Applied Knowledge · Business and Technology · Sustainable business practices

Why is external assurance over a sustainability report generally valued by stakeholders?

External assurance is valued because an independent party's opinion increases the credibility and reliability of sustainability information, giving stakeholders more confidence that the data is accurate and not misleading, though it does not guarantee profit or replace internal controls.

  1. AIt guarantees the company will make higher profits
  2. BIt increases the credibility and reliability of the reported informationCorrect
  3. CIt removes the need for internal controls over data collection
  4. DIt ensures the report complies with every national law

Explanation

Independent assurance gives users more confidence that the reported sustainability data is reliable and not misleading. It does not guarantee profits, replace internal controls over data, or confirm compliance with all laws.

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