15101 Purpose of this section, and link with the rest of PwC Audit

Overview

This topic explains:

the intended use of the Sustainability Assurance section of PwC Audit the link with the rest of the PwC Audit Guide the authority of the Sustainability Assurance section contents the format of the Sustainability Assurance section, its ‘layers’ of material, and

language conventions used the structure of the Sustainability Assurance section

PwC GuidanceUse of the Sustainability Assurance section

The Sustainability Assurance guidance is set out as Section 15000 of the PwC Audit Guide, and is an essential accompaniment to the Global Sustainability Assurance Master Data, giving specific guidance on the matters engagement leaders and teams consider in:

accepting or continuing; performing; and documenting sustainability assurance engagements.

Reporting aspects of sustainability engagements including reporting in a multilocation engagement context, are covered in the Reporting Manual 12.20. The requirements set out in this Sustainability Assurance section of the PwC Audit Guide, and the Sustainability Assurance Master Data, set out the minimum requirements and procedures we meet in performing sustainability assurance engagements.

However, this section of the Audit Guide and the Master Data cannot anticipate every scenario that may occur in providing sustainability assurance services to clients. While many of the concepts will be applicable to a wide range of subject matters, if you are in any doubt, consult with your territory Risk Management and/or Sustainability and Climate Change Group.

Link with the rest of the PwC Audit Guide

Many of the concepts covered in the PwC Audit Guide will also apply in respect of sustainability assurance engagements. Therefore, in addition to the requirements and guidance in this section, sustainability assurance engagement teams refer to the relevant content of the PwC Audit Guide for further guidance, where appropriate.

As sustainability assurance engagements are a specific subset of non-audit assurance engagements, the guidance in relevant to sustainability assurance engagements. Teams refer to the content of that section, as appropriate.

This Sustainability Assurance section of the PwC Audit Guide provides subject matter specific guidance to teams engaged to provide assurance over reported sustainability information.

The authority of the Sustainability Assurance section contents

The Sustainability Assurance section of the PwC Audit Guide follows the requirements and guidance of extant International Standard on Assurance Engagements (ISAE) 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, with more specific PwC policy and guidance provided where appropriate.

The additional guidance in this section also has regard to the exposure draft of ISAE 3000 (Revised) Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, the exposure draft of ISAE 3410 Assurance Engagements on Greenhouse Gas Statements, AT 101 Attest Engagements, as well as other guidelines and principles, such as GRI Guidelines, the Greenhouse Gas ('GHG') Protocol, ISO 14064-3 and US SOP 03-2 Attest Engagements on Greenhouse Gas Emissions Information, which establish principles for reporting sustainability information and for providing assurance over such reporting.

The PwC Sustainability Assurance section explains PwC's methodology and provides a common assurance approach for PwC member firms to follow in accordance with network standards, and so that each PwC member firm understands the approach taken by other PwC firms to a sustainability assurance engagement. This is particularly important in the case of services to multinational clients.

The format of the Sustainability Assurance section, its ‘layers’ of material and language conventions

As a result of the IAASB’s recent Clarity project, all International Standards on Auditing (ISAs) have been changed to varying degrees, with a number of the standards fully revised and redrafted. The clarified standards also adopt different language conventions and follow a new structure whereby objectives, requirements, as well as application and other explanatory material are presented in separate sections, which together form the complete ISA.

The exposure draft of ISAE 3000 similarly represents both a revision to the standard and a redraft to conform to the Clarity principles to distinguish between requirements of the standard and application guidance and explanatory material.

Although extant ISAE 3000 is not set out in Clarity format, the Sustainability Assurance section follows, as closely as possible, the Clarity format found in the audit sections of the PwC Audit Guide, distinguishing between the requirements of the standard, the application guidance, PwC policy and PwC guidance, in order to indicate the authority of the various aspects of the Sustainability Assurance section.

The PwC Sustainability Assurance section clearly separates the following ‘layers’ (or categories) of material to distinguish their authority and provide assistance in the effective and efficient application of ISAE 3000 and PwC methodology:

Layer Authority Language used

ISAE 3000 requirement*An action required from the assurance provider in order to support the objectives of assurance provided under ISAE 3000.

Required - details the actions that the assurance provider must undertake to perform an ISAE 3000 compliant engagement. Superior to all remaining layers. Most of the requirements refer to the 'application and other explanatory material' for additional information and

ISAE wording verbatim

guidance.ISAE 3000 guidanceThe ISAE 3000 application and other explanatory material explaining more precisely what a requirement means or is intended to cover, or including examples of procedures that may be appropriate under given circumstances.

Provides guidance on what actions may need to be taken to meet the requirements of ISAE 3000 and provides examples. It is ordinarily expected that engagement teams will have regard to, and follow, the ISAE 3000 guidance, as it supports the ISAE 3000 requirement layer. It may be additionally expanded by any/all of the layers below.

Generally follows ISAE wording, using language in the present tense.

PwC policySomething that PwC, as a network of firms requires territories and their non-audit assurance engagement teams to do. Policies are internal PwC requirements designed to support compliance with external requirements or to achieve PwC's quality and risk management objectives. Non-compliance may, but will not necessarily, indicate non-compliance with external requirements.

Required Similar to ISAE 3000 requirements, but the word 'shall' is used to denote the authority (consistent with the Clarity language). Policy wording is used verbatim.

PwC guidanceA distillation of the member firms' collective knowledge and experience designed to help a member firm's engagement teams or individuals perform tasks and reach conclusions more effectively and efficiently, or considered appropriate to assist teams in complying with PwC policy. Guidance is generally more specific than the requirements and application guidance of ISAE 3000. For example, guidance might include rules of thumb, such as materiality rules of thumb, sample size guidance, or subject matter specific guidance.

It is anticipated that engagement teams or territories will generally follow the guidance, and teams are encouraged to explain any departure from PwC guidance in their working papers.

Language style is broadly equivalent to that used for ISAE 3000 guidance - i.e. the present tense is used.

*Requirements of other standards, where applicable, are dealt with in a similar manner and have similar authority (e.g. ISQC 1)

The Sustainability Assurance section, like the financial statement audit section of the PwC Audit Guide, ordinarily does not include territory or industry specific material. Territories may decide to add such specific guidance in course of their local Guide tailoring. This layer may then include

local regulatory requirements, PwC policies and guidance specific for a given territory or industry. It is recommended that when tailoring locally, the language used is consistent with the authority of the material, and follows the principles for the different layers listed above.

Further guidance on considerations that, although written in the context of a financial statement audit engagement, are applicable in a similar manner for Sustainability Assurance engagements, can be found in PwC Audit, and include:

Risk management (PwC Audit 103) PwC Experience (PwC Audit 201)

Structure of the Sustainability Assurance section

The Sustainability Assurance section follows the PwC assurance process and covers the following areas for both reasonable and limited assurance engagements:

Initial engagement activities Planning and risk assessment procedures Subject matter specific considerations and gathering evidence Completion

The areas of initial engagement activities, planning and completion are covered generically (i.e. they are expected to apply to most, if not all, sustainability assurance engagements). Further guidance is given, in the Subject matter specific considerations and gathering evidence section, to subject matter specific considerations.

A separate section on multilocation sustainability assurance engagements (PwC Audit 15600)

considers matter such as organizational boundaries; independence considerations; subject matter and criteria; risk assessment; communications with component engagement teams; and reporting in a group situation.

For all sustainability assurance engagements, teams refer also to local (territory level) risk management for additional requirements relating to, among other matters:

Client and engagement acceptance and continuance Terms of the engagement The assignment of a QRP to particular engagements Requirements of local legislation, regulation and/or standards

Electronic assurance files

The Sustainability Assurance workplan has been developed using MyClient Master Data. The Master Data sets are a library of assurance procedures used to help develop the assurance plan, but represent only a collection of potential assurance procedures intended to be tailored to particular entity circumstances.

Certain procedures included in MyClient Master Data steps are designated as required (indicated by a red envelope).These are mandatory steps that need to be performed to facilitate compliance with ISAE 3000 and/ or PwC policies. Territories, where necessary, tailor or add to these steps to

comply with local requirements. However, required steps are not to be deleted. The remainder of the steps are classified as common procedures.

The Sustainability Assurance Master Data libraries are designed so that the Core Sustainability Assurance Master Data may be used for all sustainability assurance engagements, and be supplemented by subject matter specific Master Data sets (for either reasonable or limited assurance), as necessary. For example, for a sustainability assurance engagement where we are engaged to provide reasonable assurance over greenhouse gas emissions, and limited assurance over health and safety KPIs, the following Master Data sets would be used in setting up our assurance file:

Sustainability Assurance Master Data (Core) 2011 Greenhouse gas emissions supplement (reasonable assurance) 2011 Health and safety supplement (limited assurance)

Different territories distribute Master Data sets in different ways. Some deploy to servers, some store them in libraries, and others distribute them via their national upgrade/software installation process. Refer to territory guidance on obtaining the latest Master Data sets for use.