Professional Appointments

Introduction

5320.1 Sustainability assurance providers are required to comply with the fundamental principles and apply the conceptual framework set out in Section 5120 to identify, evaluate and address threats. 5320.2 Acceptance of a new sustainability assurance client relationship or changes in an existing engagement might create a threat to compliance with one or more of the fundamental principles. This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.

Requirements and Application Material

Client and Engagement Acceptance

General

5320.3 A1 Threats to compliance with the principles of integrity or professional behavior might be created, for example, from questionable issues associated with the sustainability assurance client (its owners, management or activities). Issues that, if known, might create such a threat include client involvement in illegal activities, dishonesty, questionable financial or non-financial, including sustainability, reporting practices or other unethical behavior. 5320.3 A2 Factors that are relevant in evaluating the level of such a threat include: • Knowledge and understanding of the sustainability assurance client, its owners, management and those charged with governance and business activities. • The sustainability assurance client’s commitment to address questionable issues, for example, through improving corporate governance practices or internal controls. 5320.3 A3 A self-interest threat to compliance with the principle of professional competence and due care is created if the team does not possess, or cannot acquire, the competencies to perform the professional services. 5320.3 A4 Factors that are relevant in evaluating the level of such a threat include: • An appropriate understanding of: o The nature of the sustainability assurance client’s business; o The complexity of its operations; o The quantitative and qualitative characteristics of the sustainability assurance client’s value chain; o The requirements of the engagement; and o The purpose, nature and scope of the work to be performed. • Knowledge of relevant industries or subject matter. • Experience with relevant regulatory or reporting requirements. • The existence of quality control policies and procedures designed to provide reasonable assurance that engagements are accepted only when they can be performed competently. • The level of fees and the extent to which they have regard to the resources required, taking into account the sustainability assurance provider’s commercial and market priorities. 5320.3 A5 Examples of actions that might be safeguards to address a self-interest threat include: • Assigning sufficient engagement personnel with the necessary competencies. • Agreeing on a realistic time frame for the performance of the engagement. • Using experts where necessary.