Recent Service with a Sustainability Assurance Client

Introduction

5522.1 Firms are required to comply with the fundamental principles, be independent and apply the conceptual framework set out in Section 5120 to identify, evaluate and address threats to independence. 5522.2 If a sustainability assurance team member has recently served as a director or officer, or employee of the sustainability assurance client, a self-interest, self-review or familiarity threat might be created. This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.

Requirements and Application Material

Service During Period Covered by the Sustainability Assurance Report

R5522.3

The sustainability assurance team shall not include an

individual who, during the period covered by the sustainability assurance report:

(a)

Had served as a director or officer of the sustainability assurance client; or

(b)

Was an employee in a position to exert significant influence over the preparation of the client’s sustainability information on which the firm will express an opinion, or the records underlying that information.

Service Prior to Period Covered by the Sustainability Assurance Report

5522.4 A1 A self-interest, self-review or familiarity threat might be created if, before the period covered by the sustainability assurance report, a sustainability assurance team member:

(a)

Had served as a director or officer of the sustainability assurance client; or

(b)

Was an employee in a position to exert significant influence over the preparation of the client’s sustainability information on which the firm will express an opinion, or the records underlying that information. For example, a threat would be created if a decision made or work performed by the individual in the prior period, while employed by the client, is to be evaluated in the current period as part of the current sustainability assurance engagement. 5522.4 A2 Factors that are relevant in evaluating the level of such threats include: • The position the individual held with the client. • The length of time since the individual left the client. • The role of the sustainability assurance team member. 5522.4 A3 An example of an action that might be a safeguard to address such a self-interest, self-review or familiarity threat is having an appropriate reviewer review the work performed by the sustainability assurance team member.