Larry Klingen
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Larry Klingen Questions 1. Has Nike’s sustainability report been audited? What are the different types of attestation engagements and how do they differ in terms of assurance levels? Nike’s sustainability report has not been audited. There was no reasonable assurance gathered that stated about whether Nike’s sustainability information is free from material misstatement. There are three types of attestation engagements. There are examination engagements, review engagements, and agreed-upon procedures engagements. Examination engagements are is where the auditor obtains reasonable assurance by using sufficient evidence about the measurement. Review engagements are where the auditor obtains limited assurance by using sufficient evidence about the measurement. Agreed-upon engagements are where the auditor performs specific procedures on subject matter or an assertion and reports the findings without providing an opinion or a conclusion on it. Nike Report page 89 AT-C 105.10 Definition of Attest Engagement AICPA guidance page 8 2. How does Nike define the reporting boundaries of its CSR report? Would there be alternative possibilities? How does this affect the work of an assurer of CSR information? The reporting boundary is where Nike reports its sustainability information. It includes all the sustainability information for the entire entity. They also include their environmental and socioeconomic responsibility assessment. The two other possibilities would be either using the organizational or the operational boundary. The organizational boundary would look for financial control and the operational boundary would look for activities that affect the entity’s sustainability performance. Certain regulators may establish requirements for the boundaries to be used in reporting sustainability information to the respective regulator. Nike Report page 14-15 AT-C 105.25 and AT-C 105.A34-.A41 AICPA guidance page 4-6 3. To what extent are quantitative and qualitative characteristic of materiality for an attestation of CSR information similar or different to those of a financial statement audit? How does this apply to Nike? The quantitative and qualitative characteristic of materiality for an attestation of CSR information is actually similar to those of a financial statement audit. Materiality is a very important assumption in accounting. Material information is that which affects the decisions made by users of the financial reports in which the information is disclosed. Determining a material item should include a quantitative and qualitative evaluation of that item. There are similar procedures for an attestation of CSR information and a financial statement audit. This applies to Nike because their company will have to complete both of these engagements in the near future. Nike Report page 14-15 and page 85-86 AT-C 205.16-.17 and 205.A15-A21 AICPA guidance page 31-33 4. How does Nike deal with measurement uncertainty? Do you find this approach appropriate? Nike has dealt with measurement uncertainty in a variety of ways. One way they have dealt with measurement uncertainty is they have tried to data and information externally. They have also recently overhauled their data collection process and technology to support their efforts to enhance their data quality and enable stronger confidence in their reported results. I think this approach is an appropriate way to deal with measurement uncertainty. Confirming data and information with third parties can help reduce risk of misstatement. Their efforts to improve their data collection process is also a very appropriate measure. Nike Report page 89 AICPA AT-C 105.A1 and 105.A39 AICPA guidance page 6-8, page 37-38 and page 74-75 Download 13.92 Kb. Share with your friends:
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