Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p152
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 476000–479334

automated control.

 6.       The practitioner may expect more formal documentation of the information system and controls when the information system and controls form part of the sustainability matters (e.g., when the sustainability information is about the entity's controls).

A399L. In accordance with paragraph 120L, in a limited assurance engagement, the practitioner is not required to understand the control activities component by evaluating the design of controls and determining whether they have been implemented, unless the practitioner plans to obtain evidence by testing the operating effectiveness of controls.

Identifying Control Deficiencies (Ref: Para. 121)

     1.

 2.       If deficiencies are identified related to the control environment, this may affect the practitioner's overall expectations about the operating effectiveness of controls, and therefore the practitioner's plans to test the operating effectiveness of controls.

 3.       When understanding the components of the entity's system of internal control, the practitioner may determine that certain of the entity's policies are not appropriate to the nature and circumstances of the entity. Such a determination may be an indicator that control deficiencies exist. The practitioner may consider the effect of those control deficiencies on the design of further procedures and whether to communicate the deficiencies to management or those charged with governance.

 4.       Circumstances that may indicate that control deficiencies exist include matters such as the identification of:

           * Fraud of any magnitude that involves senior management;

           * Deficiencies in the control environment;

           * Risks of material misstatement that were not identified by the entity's risk assessment process;

           * The omission of sustainability matters from the sustainability information, that are required to be reported by the applicable criteria and that are material, when those sustainability matters were not identified by the entity's process to identify sustainability matters to be reported; and

           * The inclusion of immaterial sustainability matters that obscure sustainability matters to be reported within the sustainability information.

 1.       If the practitioner's evaluation of the entity's control environment or other components of internal control raise doubts about the ability to obtain evidence on which to base the assurance conclusion, the practitioner may:

           * Perform additional risk assessment procedures until evidence has been obtained to alleviate the practitioner's doubts;

           * Withdraw from the engagement when permitted by law or regulation; or

           * Consider the implications for the practitioner's report.

Identifying and Assessing the Risks of Material Misstatement (Ref: Para. 122L, 122R)

 1.       Identifying and assessing the risks of material misstatement involves professional judgement based on the practitioner's understanding of the sustainability matters and the sustainability information and the entity and its environment.

 2.       Identifying and assessing the risks of material misstatement also involves the practitioner considering the potential for a misstatement occurring (i.e., its likelihood) and being material if it