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QNO Auditor’s role on ESG aspects New Course – (SM23)
SDG.500 TITANIUM CNO -- SDG.220
What is the auditor’s role on ESG aspects in an audit of financial statements of the Company?

Answer - Auditor's Objective & Stakeholder Expectations: The auditor seeks assurance that financial
statements are free from material misstatement, enabling them to report if the statements are fairly
presented according to the financial reporting framework. Investors seek information on how climate
risks were addressed in the audit. Auditors face pressure for transparency but must adhere to auditing
standards.
- Understanding Climate Risks: In understanding an entity, the auditor considers climate-related risks,
especially in sectors like banks, insurance, energy, transportation, and agriculture.
- Auditor's Report Significance & Emphasis on Disclosures: The auditor’s report communicates about
the audit, the auditor’s responsibilities, and significant matters addressed. The Emphasis of matter
paragraph draws attention to crucial disclosures. The auditor checks if the entity disclosed climate-
related information as per the relevant financial reporting framework.
- Consistency & Other Information: The auditor ensures consistency in information disclosed in
financial statements and other public communications. This is mandated by ISA 720 and SA 720.
Momentum and Uniformity
- Sustainability reporting gains momentum globally with demands from stakeholders and efforts
toward a uniform set of standards.
- Uniformity is hindered by a lack of a common language.
Trends and Demand in Reporting
- Reporting of sustainability information is a growing global trend, increasing the demand for its
independent assurance.
- Entities seek to enhance the integrity of their sustainability reporting.
- The demand for assurance on “sustainability branded” reporting rises.
Assurance Professionals' Role
- Auditors must understand the current landscape and monitor developments.
- There's an urgent need for accepted global sustainability/ ESG assurance standards.

QNO Benefits of sustainable Reporting New Course – (SM23)
SDG.800 TITANIUM CNO -- Unique
You have recently joined a listed company after qualifying CA final exams through campus
placement programme conducted by CMI&B at ICAI. Although the company you have joined in is
not amongst top 1000 listed companies in the country, it wants to include “Sustainability reporting”
in accordance with Global Reporting Initiative framework (GRI) in its annual report on voluntary
basis. “Sustainability reporting” seems to be new buzzword in corporate circles and you are
assigned responsibility for collating all the information required for such reporting.

In above context, dwell upon what is your understanding of “Sustainability reporting”? Can you list
some of its expected benefits?
Answer Sustainability reporting is an organization’s practice of reporting publicly on its economic,
environmental, and/or social impacts, and hence its contributions – positive or negative – towards the
goal of sustainable development.

Sustainability reporting refers to the information that companies provide about their performance to
the outside world on a regular basis in a structured way. It is the comprehensive mechanism of
measuring and disclosing sustainability data with performance indicators and management
disclosures.

Expected Benefits: It can help stakeholders to understand organizations performance vis a vis
sustainability and impacts. The reporting process emphasizes the link between financial and non-
financial performance.

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