4.19 Assurance

Assurance is a tripartite arrangement between the reporter, the assurer and the user of the report. The assurer’s primary role is to help bridge the divide between the reporter and the report user by lending credibility to the report content and, by extension, creating trust in the reporter.

Since 2003, non-financial assurance has been largely performed against AccountAbility’s AA1000 Assurance Standard10, the International Federation of Accountants’11 ISAE3000 International Standard on Assurance Engagements other than Audits or Reviews of Historical Financial Information or, in some cases, both. ISAE3000, derived from the accounting discipline, has been the usual choice of the ‘Big 4’ accountancy firms in providing non-financial assurance (in 2012, those firms provided two-thirds of the non-financial assurance delivered to the market). AA1000, a less pedantic, more principles-based framework, is often the preferred choice of smaller specialist assurance providers.

Assurance has the potential to significantly enhance business practices, not just in organisational accountability, but more broadly in improving performance, reputation and processes. The information gleaned from assurance can be used to build the reader’s confidence in the report, build stakeholder confidence in the organisation, identify improvement opportunities in reporting processes (resulting in better and more efficient future reporting), and encourage change within the business’s systems and management.

While assurance statements are often seen as the key deliverable from the engagement, assurance has the potential to deliver much more than just an assurance statement. The assurance provider should be able to deliver meaningful recommendations to the company’s leadership that identify opportunities to enhance the organisation’s accountability, management or performance.

In addition to building external trust and transparency, assurance thus helps to underpin internal confidence and capability through its ability to identify barriers and shortcomings in processes, systems and outputs, which then becomes the basis for improvement.

Footnotes

10 See AccountAbility, http://www.accountability.org.

11See IFAC, http://www.ifac.org/.

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