Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p159
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 496733–499833

or ratios that are sufficiently precise to identify material misstatements. In a limited assurance engagement, analytical procedures may be designed to support expectations regarding the direction of trends, relationships and ratios rather than to identify misstatements with the level of precision expected in a reasonable assurance engagement.

In addition, when undertaking analytical procedures in a limited assurance engagement the practitioner may, for example:

 1.                  Use data that is more highly aggregated, for example, data at a regional level rather than at a facility level, or monthly data rather than weekly data.

 2.                Use data that has not been subjected to separate procedures to test its reliability to the same extent as it would be for a reasonable assurance engagement.
 1.       Examples of reasons for the assessment given to a risk of material misstatement:

         * The inherent complexity of the sustainability matter or judgement in its measurement or evaluation. For example, a material misstatement may be more likely to arise in a disclosure where mass balance calculations are involved than when water consumption is read directly from a meter.

         * The complexity of the organisation, its ownership and control arrangements, or its geographical spread.

         * Systems and processes that are less automated or still developing, such that there may be a greater likelihood of human error, processing flaws or opportunity for unauthorised intervention.

         * Incentives to misstate, for example, if a particular target performance has to be met to retain a license to operate or to avoid fines, or to meet stakeholders' expectations.
         * Inherent limitations in the capabilities of measuring devices (e.g., water meters) or insufficient frequency of their calibration.

         * Errors or inappropriate judgements made in measuring, evaluating or disclosing the sustainability information, including in the assumptions used in making estimates, the use of inaccurate or incomplete base data on which estimates are based, or in circumstances when complex calculations are involved (e.g., when a mass balance approach is used to calculate water abstracted).

         * The risk that unidentified aspects of the sustainability matter may be missed, for example because of events or transactions outside of the normal course of business, because the preparer relies on a third party for information (e.g., external meter readers or engineering firms to calculate water abstracted), or because of undetected water or wastewater leaks or similar.

         * How weaknesses in the design of controls or the ineffective operation of controls might give rise to errors, processing flaws or opportunity for unauthorised intervention.

 1.       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