Analytical procedures

Evaluations of sustainability information through analysis of plausible relationships among both quantitative and qualitative data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount.

Another practitioner

A firm, other than the practitioner’s firm, that performs work that the practitioner intends to use for purposes of the sustainability assurance engagement and the practitioner is unable to be sufficiently and appropriately involved in that work.

For purposes of the ASSAs: 

1. The work of another practitioner that the practitioner may intend to use for purposes of the sustainability assurance engagement is performed in the context of a separate engagement.

2. Individuals from another practitioner who perform the work are not members of the engagement team as they are not performing procedures on the sustainability assurance engagement. Such individuals are also not practitioner’s experts. 

3. References to using the work of another practitioner include, when applicable, work performed by individuals from that other firm. 

Applicable criteria

The criteria used for the particular sustainability assurance engagement. 

Appropriate party(ies) 

Management or those charged with governance, as appropriate, or the engaging party, if different.

Assertions

Representations by the entity, explicit or otherwise, that are embodied in the sustainability information, as used by the practitioner to consider the different types of potential misstatements that may occur. (Ref: Para. A16R)

Assurance engagement

An engagement in which a practitioner aims to obtain sufficient appropriate evidence in order to express a conclusion designed to enhance the degree of confidence of the intended users about the sustainability information. Each assurance engagement is either a: 

1. Reasonable assurance engagement – An assurance engagement in which the practitioner reduces engagement risk to an acceptably low level in the circumstances of the engagement as the basis for the practitioner’s conclusion. The practitioner’s conclusion is expressed in a form that conveys the practitioner’s opinion on the outcome of the measurement or evaluation, including presentation and disclosure, of the sustainability matters against the applicable criteria; or

2. Limited assurance engagement – An assurance engagement in which the practitioner reduces engagement risk to a level that is acceptable in the circumstances of the engagement but where that risk is greater than for a reasonable assurance engagement as the basis for expressing a conclusion in a form that conveys whether, based on the procedures performed and evidence obtained, a matter(s) has come to the practitioner’s attention to cause the practitioner to believe the sustainability information is materially misstated. The nature, timing and extent of procedures performed in a limited assurance engagement is limited compared with that necessary in a reasonable assurance engagement but is planned to obtain a level of assurance that is, in the practitioner’s professional judgement, meaningful. To be meaningful, the level of assurance obtained by the practitioner is likely to enhance the intended users’ confidence about the sustainability information to a degree that is clearly more than inconsequential.

Assurance skills and techniques 

Planning, evidence gathering, evidence evaluation, communication and reporting skills and techniques demonstrated by an assurance practitioner that are distinct from the expertise in sustainability matters or their evaluation or measurement. 

Attestation engagement 

An assurance engagement in which a party other than the practitioner measures or evaluates the sustainability matters against the applicable criteria.

the Code

[The text in paragraph Aus 18.1 applies.]

Comparative information 

The sustainability information presented for one or more prior periods. 

Component 

An entity, business unit, function or business activity, or some combination thereof, within the reporting boundary, determined by the practitioner for purposes of planning and performing the sustainability assurance engagement. (Ref: Para. A17)

Component practitioner 

A firm that performs assurance work related to a component for purposes of the sustainability assurance engagement, and the practitioner is able to be sufficiently and appropriately involved in that work. References to a component practitioner include, when applicable, individuals from that firm. The individuals from a component practitioner who perform the work are members of the engagement team. (Ref: Para. A18–A19)

Criteria 

The benchmarks used to measure or evaluate the sustainability matters. Criteria comprise either framework criteria, entity-developed criteria or both. Framework criteria are either fair presentation criteria or compliance criteria. (Ref: Para. A20, A195)

The term “fair presentation criteria” is used to refer to a sustainability reporting framework that requires compliance with the requirements of the framework and: (Ref: Para. A528–A529)

1. Acknowledges explicitly or implicitly that, to achieve fair presentation of the sustainability information, it may be necessary for management to provide information beyond that specifically required by the framework; or

2. Acknowledges explicitly that it may be necessary for management to depart from a requirement of the framework to achieve fair presentation of the sustainability information. Such departures are expected to be necessary only in extremely rare circumstances.

The term “compliance criteria” is used to refer to a sustainability reporting framework that requires compliance with the requirements of the framework but does not contain the acknowledgments in (a) or (b) above. 

Disclosure(s) 

Sustainability information about an aspect of a topic. (Ref: Para. A21–A22) 

Engagement circumstances 

The broad context defining the particular assurance engagement, which includes: the terms of the engagement; the scope of the engagement and whether it is a reasonable assurance engagement or a limited assurance engagement; the characteristics of the sustainability matters; the applicable criteria; the information needs of the intended users; relevant characteristics of the entity and its reporting boundary; the characteristics of the entity’s management and those charged with governance; and other matters that may have a significant effect on the engagement. 

Engagement leader 

The partner or other individual, appointed by the firm, who is responsible for the engagement and its performance, and for the assurance report that is issued on behalf of the firm, and who, when required, has the appropriate authority from a professional, legal or regulatory body. “Engagement leader” should be read as referring to its public sector equivalents where relevant. (Ref: Para. A23–A24)

Engagement risk 

The risk that the practitioner expresses an inappropriate conclusion when the sustainability information is materially misstated. (Ref: Para. A25–A27R) 

Engaging party 

Management, those charged with governance, or another party, that engages the practitioner to perform the assurance engagement. 

Engagement quality review 

An objective evaluation of the significant judgements made by the engagement team and the conclusions reached thereon, performed by the engagement quality reviewer and completed on or before the date of the assurance report.

Engagement quality reviewer 

A partner, other individual in the firm, or an external individual, appointed by the firm to perform the engagement quality review. 

Engagement team 

[Deleted by the AUASB and replaced by the text appearing in paragraph Aus 18.2.]

Entity 

The legal entity, economic entity, or the identifiable portion of a legal or economic entity, or combination of legal or other entities or portions of those entities, to which the sustainability information relates. (Ref: Para. A30)

Evidence 

Information, after applying assurance procedures, that the practitioner uses to draw conclusions that form the basis for the practitioner’s assurance conclusion and report. Sufficiency of evidence is the measure of the quantity of evidence. Appropriateness of evidence is the measure of the quality of evidence. 

Firm 

A sole practitioner, partnership or corporation or other entity of individual practitioners. “Firm” should be read as referring to its public sector equivalents where relevant. (Ref: Para. A31)

Fraud 

An intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage. (Ref: Para. A32–A33)

Further procedures 

Procedures, including tests of controls and substantive procedures, performed in response to assessed risks of material misstatement.

Group 

A reporting entity for which group sustainability information is prepared. (Ref: Para. A34)

Group sustainability assurance engagement 

An assurance engagement on group sustainability information. 

Group sustainability information 

Sustainability information that includes the sustainability information of more than one entity or business unit in accordance with the criteria. (Ref: Para. A35)

Historical financial information 

Information expressed in financial terms in relation to a particular entity, derived primarily from that entity’s accounting system, about economic events occurring in past time periods, or about economic conditions or circumstances at points in time in the past. 

Intended users 

The individual(s) or organisation(s), or group(s) thereof, that the practitioner expects will use the sustainability assurance report. In some cases, there may be intended users other than those to whom the sustainability assurance report is addressed. (Ref: Para. A36–A38)

Internal audit function 

A function of an entity that performs assurance and consulting activities designed to evaluate and improve the effectiveness of the entity’s governance, risk management and internal control processes.

Management 

The person(s) with executive responsibility for the conduct of the entity’s operations. For some entities in some jurisdictions, management includes some or all of those charged with governance, for example, executive members of a governance board, or an owner–manager.

Management’s expert 

An individual or organisation possessing expertise in a field other than assurance, whose work in that field is used by the entity to assist the entity in preparing the sustainability information.

Misstatement 

A difference between the disclosure(s) and the appropriate measurement or evaluation of the sustainability matters in accordance with the applicable criteria. Misstatements can arise from error or fraud, may be qualitative or quantitative, and include omitted information or information that obscures the presentation of the disclosures. (Ref: Para. A417, A473, A479)

Misstatement of the other information 

A misstatement of the other information exists when the other information is incorrectly stated or otherwise misleading (including because it omits or obscures information necessary for a proper understanding of a matter disclosed in the other information). 

Network 

A larger structure: 

1. That is aimed at cooperation, and

2. That is clearly aimed at profit or cost-sharing or shares common ownership, control or management, common quality management policies or procedures, common business strategy, the use of a common brand name, or a significant part of professional resources.

Network firm 

A firm or entity that belongs to the firm’s network. 

Non-compliance with laws and regulations

Acts of omission or commission, intentional or unintentional, committed by the entity, or by those charged with governance, by management or by other individuals working for or under the direction of the entity, which are contrary to the prevailing laws or regulations. Non-compliance does not include personal misconduct unrelated to the business activities of the entity.

Other information 

Information not subject to the assurance engagement included in a document or documents containing the sustainability information subject to the assurance engagement and the assurance report thereon. 

Partner 

Any individual with authority to bind the firm with respect to the performance of a professional services engagement. (Ref: Para. A39)

Performance materiality 

The amount or amounts set by the practitioner at less than the amount or amounts determined to be material for a quantitative disclosure to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements in that disclosure is material. 

Personnel 

Partners and staff in the firm. 

Practitioner 

The individual(s) conducting the engagement (usually the engagement leader or other members of the engagement team, or, as applicable, the firm). Where this ASSA expressly intends that a requirement or responsibility be fulfilled by the engagement leader, the term “engagement leader” rather than “practitioner” is used. 

Practitioner’s expert 

An individual or organisation possessing expertise in a field other than assurance, whose work in that field is used by the practitioner to assist in obtaining sufficient appropriate evidence. A practitioner’s expert may be either a practitioner’s internal expert (who is a partner or staff, including temporary staff, of the practitioner’s firm or a network firm), or a practitioner’s external expert. 

Professional judgement  

The application of relevant training, knowledge, and experience, within the context provided by assurance and ethical standards, in making informed decisions about the courses of action that are appropriate in the circumstances of the engagement. 

Professional scepticism  

An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of evidence. 

Professional standards 

Australian Standards on Sustainability Assurance (ASSAs) and relevant ethical requirements.

Relevant ethical requirements 

[Deleted by the AUASB and replaced by text appearing in paragraph Aus 18.3.] 

Reporting boundary 

Activities, operations, relationships or resources to be included in the entity’s sustainability information.

For purposes of the ASSAs, the reporting boundary is determined in accordance with the applicable criteria. (Ref: Para. A40–A41)

Risk of material misstatement 

The risk that the sustainability information is materially misstated prior to the engagement. 

Risk assessment procedures 

The procedures designed and performed to:

1. In a limited assurance engagement, identify and assess the risks of material misstatement, whether due to fraud or error, at the disclosure level; and

2. In a reasonable assurance engagement, identify and assess the risks of material misstatement, whether due to fraud or error, of the disclosures at the assertion level. 

Staff 

Professionals, other than partners, including any experts the firm employs. 

Substantive procedures 

Procedures designed to detect material misstatements. Substantive procedures comprise tests of details and analytical procedures. (Ref: Para. A42) 

Sustainability competence 

Competence in the sustainability matters that are the subject of the sustainability assurance engagement and in their measurement or evaluation. 

Sustainability information 

Sustainability information – Information about sustainability matters. (Ref: Para. A43)

For purposes of the ASSAs: 

1. Sustainability information results from measuring or evaluating sustainability matters against the criteria. 

2. Sustainability information that is the subject of the assurance engagement is the equivalent of “subject matter information” in other AUASB assurance standards.

3. References to “sustainability information to be reported” are intended to relate to the entirety of the sustainability information to be reported by the entity, and are used primarily in the context of the practitioner’s preliminary knowledge of the engagement circumstances. 

4. If the assurance engagement does not cover the entirety of the sustainability information reported by the entity, the term “sustainability information” is to be read as the information that is subject to assurance. (Ref: Para. A44)

Sustainability matters 

Environmental, social, governance or other sustainability-related matters as defined or described in law or regulation or relevant sustainability reporting frameworks, or as determined by the entity for purposes of preparing or presenting sustainability information. 

For purposes of the ASSAs, sustainability matters being measured or evaluated in accordance with the criteria are the equivalent of “underlying subject matter” in other AUASB assurance standards. (Ref: Para. A45–A46)

System of internal control 

The system designed, implemented and maintained by those charged with governance, management and other entity personnel to provide reasonable assurance about the achievement of an entity’s objectives with regard to sustainable business activities and the reliability of sustainability reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations related to sustainability matters. 

The term “controls” refers to policies or procedures that an entity establishes to achieve the control objectives of management or those charged with governance, relating to any aspects of one or more of the components of the system of internal control. 

Those charged with governance 

The person(s) or organisation(s) (for example, a corporate trustee) with responsibility for overseeing the strategic direction of the entity and obligations related to the accountability of the entity. This includes overseeing the sustainability reporting process. For some entities in some jurisdictions, those charged with governance may include management personnel, for example, executive members of a governance board of a private or public sector entity, or an owner–manager. 

Uncorrected misstatements 

Misstatements that the practitioner has accumulated during the assurance engagement and that have not been corrected. 

Lead auditor (for the sustainability report)

Engagement leader

Auditor

Firm

Review (noun)

Limited assurance engagement

Lead auditor (for the sustainability report) or other professional members of the audit team conducting the audit or review, or, as applicable, the auditor. 

Practitioner

Audit (noun)

Reasonable assurance engagement

Audit (noun) or review (noun), as applicable).

Sustainability assurance engagement