Question

The AICPA has assembled a Sustainability Task Force that is in the process of developing a Sustainability Assurance Guide due to the increased expectations regarding the reporting of corporate social and environmental performance. For your review, below is the AICPA resource.

Assume you are a member of this taskforce; discuss what types of assertions you would expect your client’s management to make regarding socially responsible goals. How do you think stakeholders will rely on the assurances that are provided by practitioners? Discuss some of the challenges that practitioners may face as they offer this service offering to their clients.

Be sure to support your statements with logic and argument, citing any sources referenced. Post your initial response early, and check back often to continue the discussion. Be sure to respond to your peers’ and instructor’s posts, as well.

Resource:

Answer 1

The assertions that the cliets management expects to make regarding socially responsible goals:-

1) On disclosure and reporting
This is a sensitive area and needs regulatory interventions. this is to do with continuois disclosure of material and related party arrangements and shareholder agreements. the intension of such disclosure is to reduce asymmetry of information between and amongst shareholders inter se.
2)On prevention of oppression and mismanagement.
A company needs to make provisions to protect tge absentee shareholders from oppression and missmanagement, whether promoter controlled or otherwise.
3)on empowering board independence
From an agency theory perspective, an independent, objective driven , non aligned and trustworthy board of directors is an essential building block for the protection of shareholders.
4) on strengthening Audit independence
Auditors Independence, to the extent one grants that as an acheivable possibility, is vulnerable to erosion for a number of reasons, amonng them are economic dependence, familarity, complacence and gratitude.

Relaibility on Practitioners by stakeholders:-
Stakeholders are wide spead and will rely on the practioners only if the practise what they preach. I.e., as per the disclosures and assurities on corporate social responsibilities given by the company, it should fulfil the same. Not only on papers, must be applied in everyday life.

Challenges faced by practisioners:
1) Reliability:- this is a major challenge as stakeholders will not always believe on the commitments made by the company.
2) ommision:- the company/ practisioner may fail to include certain practices prevailing in the commercial market and expected by the stakeholders.