ACCA Strategic Professional · Advanced Audit and Assurance (International) · The assurance of sustainability
Zelda Co, a listed manufacturer, asks Hartley & Co to provide assurance on the greenhouse gas (GHG) emissions figures in its sustainability report. Hartley & Co will perform procedures but wants to express its conclusion in a negative form, such as 'nothing has come to our attention that causes us to believe the figures are materially misstated'. Which level of assurance does this form of conclusion represent?
A negatively worded conclusion, such as nothing has come to our attention indicating material misstatement, represents limited assurance. Reasonable assurance is expressed positively, and absolute assurance is never provided. The entity being listed or the data being quantitative does not change the form of conclusion.
- AReasonable assurance, because the report is for a listed entity
- BLimited assurance, because the conclusion is expressed negativelyCorrect
- CAbsolute assurance, because the figures are quantitative
- DNo assurance, because sustainability data is non-financial
Explanation
Under ISAE 3000 (Revised), a limited assurance engagement results in a conclusion stated in negative form, based on fewer procedures than a reasonable assurance engagement. Reasonable assurance gives a positive conclusion, such as that the information is fairly stated in all material respects. Listing status does not determine the level of assurance, and absolute assurance is never given.
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