ICAI issues Standard on Sustainability Assurance Engagements (SSAE) 3000

The Sustainability Reporting Standards Board (SRSB) of the Institute of Chartered Accountants of India (ICAI), issues Standard on Sustainability Assurance Engagements (SSAE) 3000, “Assurance Engagements on Sustainability Information”.

The Institute of Chartered Accountants of India (ICAI) is a statutory body established by an Act of Parliament under the Chartered Accountants Act, 1949.

This Standard on Sustainability Assurance Engagements draws reference from International Standard on Assurance Engagements (ISAE) 3000(Revised), “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board of the International Federation of Accountants (IFAC).

Introduction

Given the link between climate change and corporate performance, many entities are reporting their sustainability performance for internal management purposes and are making external disclosure to various stakeholders, by preparing reports such as:

• Business Responsibility and Sustainability Reporting (BRSR)
• Sustainability/ ESG Report
• Integrated Report
• Task Force on Climate-Related Financial Disclosures (TCFD) Report
• Other reports as per global/ local sustainability standards

This is primarily on account of:

a. Regulatory disclosure regime;

b. Informing investors and other stakeholders on a voluntary basis.

The intended users of this Standard include:

• Assurance providers providing assurance on sustainability information.
• Entities seeking to engage a professional auditor.
• Regulators, investors, and other users of Sustainability Reporting data.

Scope of this Standard on Sustainability Assurance Engagements (SSAE) 3000

a) This Standard on Sustainability Assurance Engagements (SSAE) 3000 deals with assurance engagements on an entity’s sustainability information. This Standard should be read in conjunction with the “Framework for Assurance Engagements” issued by ICAI. However, in case of any conflicts between this standard and the Framework for Assurance Engagements, this Standard shall prevail.

b) SSAE 3000 is an umbrella standard applicable to all assurance engagements on sustainability information. In case there is subject matter information to which a specific assurance standard applies (e.g. GHG emissions), SSAE 3000 will apply in addition to the subject matter specific standard (e.g. SAE 3410).

c) Where the engagement is subject to laws or regulations, SSAE 3000 does not override those laws, regulations, or provisions. In the event that laws or regulations differ from this standard, an engagement conducted in accordance with laws or regulations, or the provisions of a particular scheme will not automatically comply with SSAE 3000. The assurance practitioner is entitled to represent compliance with SSAE 3000 in addition to compliance with laws or regulations only when all applicable requirements of SSAE 3000 have been met.

d) Not all engagements performed by practitioners are assurance engagements. Other frequently performed engagements that are not assurance engagements include:

(a) Engagements covered by Standards on Related Services (SRS), such as agreed-upon procedure and compilation engagements.1

(b) Consulting (or advisory) engagements, such as management consulting. (Ref: Para. A1)

e) The following engagements, which may be consistent with the definition of assurance engagements, are not considered assurance engagements in terms of this SSAE:

(a) Engagements to testify in legal proceedings regarding accounting, auditing, taxation or other matters;

(b) Engagements that include professional opinions, views or wording from which a user may derive some assurance, if all of the following apply:

(i) Those opinions, views or wording are merely incidental to the overall engagement;

(ii) Any written report issued is expressly restricted for use by only the intended users specified in the report;

(iii) Under a written understanding with the specified intended users, the engagement is not intended to be an assurance engagement; and

(iv) The engagement is not represented as an assurance engagement in the professional accountant’s report.

Attestation and Direct Reporting Engagements

This standard notes that an assurance engagement may be either an attestation engagement or a direct reporting engagement. SSAE 3000 deals only with attestation engagements.

Procedures for Reasonable Assurance and Limited Assurance Engagements

This standard notes that an assurance engagement may be either a reasonable assurance engagement or a limited assurance engagement; and SSAE 3000 deals with both these types of assurance engagements.

In both reasonable assurance and limited assurance engagements on sustainability information, the assurance practitioner chooses a combination of assurance procedures, which can include enquiry; inspection; observation; confirmation; recalculation; reperformance; and analytical procedures. Determining the assurance procedures to be performed on a particular engagement is a matter of professional judgement. Because sustainability information covers a wide range of circumstances, the nature, timing and extent of procedures are likely to vary considerably from engagement to engagement.

Application

This Standard applies on assurance engagements which pertain to providing reasonable or limited assurance on sustainability information.

Effective Date

The effective date of application of SSAE 3000 shall be as follows –

I. Voluntary basis for assurance reports covering periods ending on March 31, 2023.

II. Mandatory basis for assurance reports covering periods ending on or after March 31, 2024.

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