Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p132
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 415677–418999

applicable criteria obtained in accepting the engagement when performing risk assessment procedures with information from, for example:

           * When applicable, other engagements performed by the engagement leader for the entity, such as the audit of financial report or verification of specific matters (e.g., verification of water consumption for a significant operation within the entity).

           * Previous experience with the entity, if such information remains relevant and reliable as evidence for the current engagement.

Engagement Team Discussion (Ref: Para. 105)

 1.       Discussions between the engagement leader and other key members of the engagement team, and any key practitioner's external experts may:

           * Provide an opportunity for more experienced engagement team members, including the engagement leader, to share their insights based on their knowledge of the entity.  Sharing information contributes to an enhanced understanding by all engagement team members.

           * Allow the engagement team members to exchange information about how and where the sustainability information might be susceptible to material misstatement due to fraud or error.

           * Assist the engagement team in planning and performing the engagement.

 1.       When the engagement is carried out by a single individual, such as a sole practitioner, consideration of the matters referred to in paragraph 105 nonetheless may assist the practitioner in identifying and assessing risks of material misstatement.

Understanding the Sustainability Matters and the Sustainability Information (Ref: Para. 106)

 1.       The characteristics of events or conditions that could give rise to a material misstatement of the disclosures may include complexity, judgement, change, uncertainty, or susceptibility to misstatement due to management bias or fraud, thus resulting in susceptibility of the disclosures to material misstatement, whether due to fraud or error.
 1.       Material misstatements due to fraud or management bias in sustainability information may relate to matters such as the following:

          * Misstating sustainability information (including omitting information) to avoid penalties or fines, potentially aggressive or overly optimistic internal or external goals, intentionally inaccurate or misleading product or corporate public statements or claims.

          * Omitting sustainability matters when identifying the matters to be included in the sustainability information, that may be unfavourable or for which the information is difficult to obtain, even though those matters are material to intended users.

          * Misstating sustainability information to enable the entity to be favourably considered in relation to future endeavours, or to be a factor in funding, supplier or customer arrangements or negotiations.

          * Misstating sustainability information to reduce carbon tax liabilities or overstate carbon credits created.

          * Intentionally reporting sustainability information relating to performance or compensation incentives in a biased way in order to influence the outcome of the performance reward or compensation.

          * Pressures linked to obtaining certain credentials or recognitions (e.g., a 'green' seal or rating), or