Page 259 - AAA Integrated Workbook STUDENT S18-J19

Audit of social, environmental and integrated reporting

Difficulties measuring and reporting

4.1 Measurement difficulties

 KPIs may not be specific enough to measure accurately.

 The concepts involved may lack precise definition.

 Systems and controls may not be in place to capture such information reliably.

4.2 Reporting difficulties

 Accountants lack the specific skills and experience needed to assess many
environmental/social matters. For example, it appears unlikely that an auditor
would be able to measure carbon emissions or energy consumption.

 There is a significant amount of subjectivity with regard to social and
environmental reports, for example, the use of the term 'environmentally
friendly.'

 Evidence may not be sufficient or appropriate for the purposes of providing
assurance. It is unlikely that companies will establish sophisticated measuring
and recording systems to gather the data used for all KPIs.

 There may be potential for manipulation to achieve the desired result.

255