Environmental and social transparency under the ... - ClientEarth

118 | Environmental and social transparency under the Companies Act 2006Annex 4: Auditing of company environmental and social accounting and reporting | 119A.4.2.3 International assurance standards for non-financialreportingInternational standards on assurance give guidance to assurance providerson how best to carry out their work, and provide companies withrecognizable assurance ‘brands’ to apply to their reports, which can helpusers understand the standard of scrutiny that has been applied.The most important are summarized below.i. International Standard on Assurance Engagements (ISAE)3000: ‘Assurance Engagements Other Than Audits orReviews of Historical Financial Information’ISAE 3000 was developed (and subsequently revised) by the InternationalAuditing and Assurance Standards Board (IAASB) of the InternationalFederation of Accountants (IFAC), the body responsible for issuing internationalaccounting and auditing standards for the accounting professions.All members of IFAC, including all Big Four firms, 310 are ‘encouraged’ touse the ISAE 3000 standard. 311AA1000AS seeks to provide guidance for those carrying out sustainabilityassurance. It covers the full range of an organisation’s disclosure andperformance based on three core principles: ‘materiality’; ‘completeness’;and ‘responsiveness’. There are two types of AA1000AS engagement: Type1, which is intended to give stakeholders assurance on the way an organisationmanages sustainability performance, and how it communicatesthis in its sustainability reporting, without verifying the reliability of thereported information; and Type 2, which also involves evaluation of thereliability of specified sustainability performance information.It provides guidance to assurance providers by outlining processes to followand issues to consider when carrying out assurance. It also outlines‘levels’ of AA1000AS assurance (‘high’ and ‘moderate’), and explains whatcharacterises each.ISAE 3000 establishes basic principles and essential procedures for allassurance engagements other than audits or reviews of historical financialinformation (which are covered by ISAs and ISREs). This includes environmental,social and sustainability reports.It sets out guidelines for providers to consider on a range of issues whencarrying out their assurance review, seeking to ensure the best possibleprocess. These include: ethical issues; quality control; engagement acceptance;planning; using the work of an expert; obtaining evidence; documentation;and preparing the assurance report.ii.AA1000 Assurance Standard (AA1000AS)AA1000AS was developed by the UK-based organisation ‘AccountAbility’:the Institute for Social and Ethical Accountability, a body that bringstogether businesses, academics and practitioners to develop ways tomeasure and report on social and ethical performance of organisations.AA1000AS is a voluntary standard, but is internationally recognised andwidely used.