Module: | SEBI LODR & Corporate Governance Frameworks
Q33: Consider the following statements regarding the adoption of the International Standard on Sustainability Assurance (ISSA) 5000 in India:
1. The ICAI adopted the principles of ISSA 5000 as the overarching standard for assurance engagements on sustainability and ESG reports.
2. A reasonable assurance engagement under this standard is immediately mandatory for all listed entities in India from the financial year 2025-2026.
3. The standard provides a comprehensive framework that covers both limited assurance and reasonable assurance engagements.
Which of the above statements is/are incorrect?
2. A reasonable assurance engagement under this standard is immediately mandatory for all listed entities in India from the financial year 2025-2026.
3. The standard provides a comprehensive framework that covers both limited assurance and reasonable assurance engagements.
Which of the above statements is/are incorrect?
✅ Correct Answer: B
🎯 Quick Answer:
B. Only 2 is incorrect.Structural Breakdown: Statement 1 is correct; the ICAI has aligned with the IAASB's ISSA 5000 standard.
Statement 2 is incorrect; reasonable assurance is not immediately mandatory for all listed entities; rather, SEBI mandated it only for the BRSR Core metrics of the top listed entities under a phased glide path.
Statement 3 is correct; the standard is designed to accommodate both limited and reasonable assurance levels depending on regulatory or client needs.
Historical/Related Context: With the rise of greenwashing, investors demanded that sustainability reports carry the same level of verified trust as financial statements, prompting the global rollout of ISSA 5000 and its subsequent adoption by the ICAI.
Causal Reasoning: The phased approach to reasonable assurance prevents a capacity shock within the audit profession, allowing firms time to train personnel in complex ESG metrics like greenhouse gas measurement before it becomes universally mandatory.