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ma’am how does providing an assurance engagement over sustainability report create self review threat?
and even advocacy threat for that matter? no way the audit firm seems to be promoting or representing client in any way providing an independent review report over it!
I know you’ve asked me time and agin to not bog down into the specifics of every answer, but I just can’t stay put with doubts in my head. I cannot tell apart if something’s really outdated or there’s a simple knowledge gap . And so to play it safe I ask you…I apologise sincerely for bothering you so much
Because there are $s in the sustainability report that should correspond to $s in the financial statements – charitable donations leaps out as the most obvious – but also the calculation of average annual spend on training per employee would presumably be based on a total that should be included in SoPL.
ma’am am extremely sorry but I still can’t understand how self-review and advocacy threat arise?
Please refer to definition of self-review threat (that I have given before – e.g. here https://opentuition.com/topic/cheetah-co-s17-d17-akaplan-kit-part-b).
All we are saying is that if there is “overlap” between two activities/judgments, that because the auditor looks at one, they may “not appropriately evaluate” the results of the other. So, for example, the audit team might not obtain sufficient appropriate audit evidence regarding the disclosure of charitable donations in the financial statements because they know it has been “worked on” in connection with the sustainability report by someone else in the organisation – so they simply accept it, without question, as correct.
All I can say is that I agree that the advocacy threat is a little far-fetched – especially as auditor’s increasingly report on their audit clients’ CSR reports(!)
You might be interested in this https://opentuition.com/acca/aaa/acca-advanced-audit-and-assurance-aaa-question-newman
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