Question

We stressed existing key differences between a firm's (1) independent auditor and (2) other entities [e.g., AccountAbility] providing assurance standards regarding sustainability accounting. Most Big 4 firms provide assurance and consulting on sustainability reporting, but often focus more on consulting than assurance sustainability reports. Compare and contrast how both types of entities measure materiality and other sustainability reporting matters.

Answer 1

Substainability reporting matters :

For substainability reporting, we use many different terms such as substainability,good citizenship,environmental,social and governance, environmental responsibility, responsible investment.

One important matter in substainability reporting is stakeholders. Stakeholders are those who use the products,who live in communities where the company operates and who are effected by the company.

Companies limit their reporting to investors,suppliers,employees,customers,neighbors and governments who clearly have a ‘stake’ in the company.

Another important matter is materially. It means material to a stakeholder and which stakeholder are material to the company. Many substainability reports discuss how company determines what is material,which is not measured in quantities. Substainability gives percentages showing improvements such as ‘use of water for each dollar of sales was down 3.7% .

The reports may also address good citizenship and covers other areas which do not effect environmental substainability such employee diversity,community involvement, human rights.

The assurance reports contain a variety of information under a variety of standards such as:

• A few reports refer internal standards which were generally available on company’s website.

• some websites are quite difficult to use, making it hard to find the assurance reports.

• There are 11 different frameworks, only one frequently referred to was GRI.

• Reports gave assurance that reported GRI level of assurance was appropriate.

•Some specify with statistics they give, others only give generalised assurance.

• There was a wide variety of information reported as to independence, impartiality and competence and materiality.

• Improvements from previous years and suggestions for the future years are stated in the reports.

• some reports give outlines of work performed, sample size,locations visited,interviews but others indicate limitations to those procedures performed.