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

Zenith Foods plc, a listed company, is preparing its first sustainability-related financial disclosures using IFRS Sustainability Disclosure Standards. Its audit firm has been asked to provide assurance on them. Which statement best describes the primary focus of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information?

IFRS S1 requires disclosure of sustainability-related risks and opportunities that could reasonably be expected to affect an entity's cash flows, access to finance or cost of capital. It focuses on investor-relevant information, not all societal impacts, and is a reporting standard rather than an assurance standard.

  1. AIt requires disclosure of sustainability-related risks and opportunities that could reasonably be expected to affect the entity's cash flows, access to finance or cost of capitalCorrect
  2. BIt requires disclosure of all impacts the entity has on society and the environment, regardless of financial effect
  3. CIt prescribes the audit procedures to be performed on sustainability information
  4. DIt sets out only climate-related disclosures and excludes other sustainability topics

Explanation

IFRS S1 focuses on information useful to primary users of general purpose financial reports, covering sustainability-related risks and opportunities that could reasonably be expected to affect prospects. Option B describes an impact-focused (double materiality) approach, which is not the IFRS S1 basis. IFRS S2 deals with climate, and S1 is not an assurance standard.

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