Serving as a Director or Officer of a Sustainability Assurance Client

Introduction

5523.1 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. 5523.2 Serving as a director or officer of a sustainability assurance client creates self-review and self-interest threats. This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.

Requirements and Application Material

Service as Director or Officer

R5523.3

A leader or employee of the firm or a network firm shall not serve as a director or officer of a sustainability assurance client of the firm.

Service as Company Secretary

R5523.4

A leader or employee of the firm or a network firm shall not serve as Company Secretary for a sustainability assurance client of the firm, unless:

(a)

This practice is specifically permitted under local law, professional rules or practice;

(b)

Management makes all relevant decisions; and

(c)

The duties and activities performed are limited to those of a routine and administrative nature, such as preparing minutes and maintaining statutory returns. 5523.4 A1 Duties of Company Secretary might range from: administrative duties (such as personnel management and the maintenance of company records and registers) to duties as diverse as ensuring that the company complies with regulations or providing advice on corporate governance matters. Usually this position is seen to imply a close association with the entity. Therefore, a threat is created if a leader or employee of the firm or a network firm serves as Company Secretary for a sustainability assurance client. (More information on providing non-assurance services to a sustainability assurance client is set out in Section 5600, Provision of Non-assurance Services to a Sustainability Assurance Client.)