The AUASB consulted on proposed amendments to ASSA 5000 General Requirements for Sustainability Assurance Engagements in relation to auditor reporting on sustainability assurance engagements under the Corporations Act 2001 (the Act). The consultation included:

• Proposed wording for the assurance opinion/conclusion to meet the requirements of the Corporations Act and ASSA 5000.
• Clarifications to the type of reporting framework applicable to Year 1 assurance vs Year 2 onwards.
• Proposed examples for inherent limitations relevant to sustainability assurance engagements which auditors may wish to use in their reports.
• Possible approaches to helping distinguish the auditor’s report on the sustainability report and the auditor’s report on the financial report to assist users in understanding the assurance being provided.

The key points raised in our submission are:

• We agree that the wording of the auditor’s conclusion/opinion should comply with the requirements of ASSA 5000 and the Act, however there is legal uncertainty whether this is achievable through combining the wording of both. The requirements for what is included in an auditors’ report is normally left to audit standards, with laws requiring that those standards are adhered to. Contrastingly, for sustainability assurance engagements the Act has specified very detailed requirements for the content of the auditor’s conclusion/opinion, overlapping and slightly different from what is required in the internationally equivalent ASSA 5000. Therefore, there is uncertainty as to whether the proposed combined conclusion/opinion wording meets the requirements of the Act from a legal perspective.
• We agree that the review/audit is based on a compliance framework in Year 1 and a fair presentation framework from Year 2 onward.
• We support the inclusion of example inherent limitations with appropriate communications so that assurance practitioners understand that these will need to be tailored as appropriate for their individual engagements.
• We believe that the AUASB does need to consider ways for the auditor’s report on the financial report and the auditor’s report on the sustainability report to be clearly distinguished to avoid confusion for users of the reports.