Audit & ESG

Question 1

Planning

Answer 1

1. Understand and agree scope of engagement
2. Obtain an understanding of entity including users info needs
3. Consider appropriateness of information in light of user’s needs.
4. Consider feasability of conducting engagement: complexity, potential for manipulation, access to quality evidence, access to client staff. Whether KPI’s specific enough.

Ω

Question 2

Measurement Difficulties

Answer 2

1. Deciding which KPI’s which to report
2. KPI’s ma ynot be specific enough to measure accurately
3. Concepts may lack precise definition
4. System and controls not be in place to capture information reliably.

Question 3

Reporting Difficulties

Answer 3

1. Accountants may lack specific skills and experience
2. Significant subjectivity of subject matter
3. Evidence may not be sufficient or appropriate- forward looking
4. Potential for manipulation to achieve desired result.

Question 4

Assurance Report

Answer 4

1. Description of scope of engagement and type of assurance provided.
2. Identification of intended user.
3. Respective responsibilities of client and assurance provider
4. Details of work performed.
5. Opinion or conclusion.

Question 5

Focus of testing

Answer 5

1. Review mgmts risk assessment in respect of SES matters
2. Assess adequacy of mgmts asset impairment reviews.
3. Obtaining evidence from experts such as environmental experts and lawyers.
4. Reviewing compliance with laws and regulations
5. Evaluating mgmts use of GC Basis of accounting and adequacy of disclosurs.

Question 6

What is assurance usually given on

Answer 6

1. Amounts & disclosures in financial statement relating to SES matters e.g provisions impairments of assets.
2. Reading other information relating to SES ensuring its consistent with FS.
3. Providing assurance over KPI’s included in annual report

Question 7

KPI’s

Answer 7

1. Tonnes of waste sent to landfill
2. Reduction in water usage
3. Reduction in electricity usage
4. % electricity from renewable/sustainable source.
5. Reduction in CO2 emissions
6. No. of serious accidents in the workplace
7. Numberof staff volunteer days
8. $ donated to charity

Question 8

Procedures for Customers

Answer 8

Customers
* Inspect the customer satisfaction survey responses and recalculate the overall
score reported in the CSR report.

• Inspect customer complaints to assess whether there is any evidence which would cast doubt over the reliability of the customer satisfaction surveys
  conducted.
• Enquire of management whether communication with communities is
  measured purely in terms of frequency or whether quality of communications is
  also considered.
• Enquire of management how the company communicates with communities.
  This may be through letters, emails or physical meetings on a regular basis with
  residents.
• Inspect copies of emails, letters, and minutes of meetings to confirm the
  frequency of communication

Question 9

Procedures for Employees

Answer 9

Inspect HR records to obtain staff turnover figures and compare the level of staff turnover with prior year to assess staff retention rates.

• Review attendance records and compare number of days of absenteeism as a proportion of total working days per month.
• Enquire of management how staff satisfaction is measured. For example, this may be via an internal, company produced survey or by an external survey such as the Best Companies survey.
• Inspect the survey responses to confirm the information reported in respect of
  staff satisfaction rates.
• Ascertain through discussion with management and/or correspondence with legal advisors whether there is any legal action being taken against Beusch Homes Co by former or current employees.

Question 10

Procedures for Environmental

Answer 10

• Inspect copies of invoices with landfill sites or disposal companies confirmingthe amount of waste taken to landfill during the year.
• Compare the volume of waste taken to landfill this year with last year to confirm
  that it has reduced.
• Enquire with management how the volume of waste sent to landfill is to be reduced. It would be expected that there is a limit to the extent of reduction that can be achieved.

*Enquire of management what alternatives there are to traditional building materials. For example, timber from sustainable forests, reclaimed bricks.

• Enquire of management how it captures information about the use of sustainable building materials.
• Review agreements with/invoices from major suppliers of building materials that are accredited as being responsibly sourced.
• Enquire of management whether the fuel goal is adjusted for the number of employees.
• Inspect mileage reports and fuel usage of company cars to confirm that fuel consumption has reduced.