Sustainability Audit: Preconditions and Prospects for Implementation

Анотація

The article substantiates the methodological preconditions and identifies the prospects for the development of sustainability audit in Ukraine, taking into account two interrelated directions: public-sector audit of the Sustainable Development Goals (SDGs) and independent assurance on sustainability reporting. The relevance of the study stems from the fact that sustainable development has evolved into a system of goals, indicators, and accountability for both the state and business, which increases the need for independent verification of data reliability, the quality of managerial decisions, and the effectiveness of measures declared as contributions to achieving the SDGs and sustainability objectives. It is established that, within public-sector auditing, sustainable development is operationalised through preparedness audits and audits of SDG implementation as a form of performance audit, focused on assessing policy coherence, coordination, monitoring systems, and accountability. It is shown that in independent practice a distinct segment of assurance engagements on sustainability reporting is emerging, and the adoption of ISSA 5000 confirms their nature as assurance engagements - different from an audit or review of historical financial information - by defining the framework for the subject matter, criteria, and levels of assurance. The study substantiates the appropriateness of a two-level approach to defining the audit object: for public-sector audit - SDG implementation (preparedness, processes, programmes, accountability); for independent practice - sustainability reporting as subject matter information prepared in accordance with applicable criteria. A structured approach to defining the subject matter is proposed through distinguishing the overall subject matter and a second-order subject matter, which makes it possible to justify the selection of subject matter information and to develop a classification of possible forms of such information in the sustainability domain. It is demonstrated that the majority of relevant engagements relate to historical non-financial information, whereas the verification of plans and targets pertains to prospective non-financial information, and the assessment of prospective financial consequences pertains to prospective financial information. It is argued that a key direction for further research is the methodological development of criteria and the evidence base, including ensuring data quality in assurance engagements on sustainability reporting, as well as enhancing performance-audit tools for assessing the effectiveness of public policies and programmes aimed at achieving the SDGs.

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