Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p160
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 499560–502729

More persuasive evidence may be needed to provide the basis for a conclusion on the sustainability information due to engagement circumstances.  For example, the practitioner may have identified and assessed a higher risk of material misstatement. In such circumstances, it may be appropriate to increase the quantity of the evidence (e.g., by obtaining corroborating evidence from a number of independent sources).

 2.       More persuasive evidence may be needed if the practitioner, through the understanding of the entity and its environment and its system of internal control, has identified matters such as:

           * A higher assessed risk of material misstatement.

           * An increased focus of intended users on a topic or aspect of a topic.

           * The lack of a relationship between the sustainability information and other relevant information that precludes the performance of analytical procedures.

           * A control environment in which the entity does not demonstrate behaviour consistent with a commitment to integrity and ethical values.

           * Risks of material misstatement that have not been identified by the entity's risk assessment process.

           * Information systems that are not appropriate to the circumstances of the entity.

           * A lack of maturity in the sustainability matters or the information system used to prepare the sustainability information.

           * Errors in the disclosure in the past.

           * A new area, topic or aspect of a topic.

Overall Responses (Ref: Para. 128L, 128R)

 1.       Paragraphs 126L and 126R require the practitioner to design and perform further procedures whose nature, timing and extent are responsive to the assessed risks of material misstatement, whether due to fraud or error, at the disclosure level (limited assurance) or at the assertion level for the disclosures (reasonable assurance). However, the practitioner may identify circumstances that indicate that overall responses may be needed in accordance with paragraph 128L or 128R, such as the following:

           * Deficiencies in the control environment may undermine the effectiveness of other controls, in particular in relation to fraud. In such cases, material misstatements may occur in any assertion or in multiple assertions.

           * There may be incentives for intentional misstatement of the sustainability information, for example, those who are directly involved with, or have the opportunity to influence, the reporting process may have a significant portion of their compensation contingent upon achieving aggressive targets or complying with laws and regulations that have a direct effect on the sustainability information.

           * The practitioner may identify an increased risk of material misstatement pervasively throughout the sustainability information (that is, not related to one disclosure or assertion, or a few disclosures or assertions).

 1.       Designing and performing overall responses may include:

           * Assigning and supervising personnel, considering the knowledge, skill and ability of the individuals to be given significant