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Assessment & Assurance

Statistic calculating

SEBI has replaced “reasonable assurance” and “limited assurance” with “assessment or assurance” to facilitate ease of doing business for listed entities and their value chain partners with regard to requirements under BRSR. The changes shall be applicable for BRSR Core disclosures for listed entities from FY 2024-25 and value chain from FY 2026-27.  

How can Dha-ra help?

Dha-ra is capable of providing a assurance on (or conduct and assessment of) the BRSR Report. This assurance/assessment significantly enhances confidence stakeholders can have in the sustainability-related information published by the entity. Assurance engagement structure is depicted below: 

Legal Entity /Engaging party Subject matter Expert EP / Engagement Partner Intended Users Suitable Appropriate Evidence Assurance Report Output responsible Used By Subject Matter responsible + Evaluator / Measurer Applicable Criteria responsible Subject Matter Information Output Board / Senior Management use for performance evaluation Regulators use for compliance Could be

Reasonable and Limited Assurance 

Entities and value chain partners may opt for assurance of their BRSR reports to cater to global investors/ regulators. They may obtain reasonable assurance on certain KPIs and limited assurance on other KPIs. The following are the differences between Reasonable and Limited Assurance: 

Limited Assurance Reasonable Assurance Point of difference Sl. No. • Extent of evidence needed is less • Emphasis on inquiries and analytical procedures • Extensive procedures than limited assurance • Emphasis also on testing internal controls and obtaining evidence from external sources . Evaluation Procedures 1 . Increases the user’s confidence about the subject matter to a degree that is clearly more than inconsequential Conveys the opinion on the outcome of the measurement/evaluation of the subject matter against the criteria . Significance of the Conclusions 2 . Negative “nothing has come to our attention to cause us to believe the subject matter information is materially misstated” Positive “in our opinion, the subject matter conforms in all material respects with the identified suitable criteria” Reporting Language 3 . • Extent of evidence needed is less • Emphasis on inquiries and analytical procedures • Extensive procedures than limited assurance • Emphasis also on testing internal controls and obtaining evidence from external sources . Evaluation Procedures 4 .

Assurance and Assessment

From FY 2024-25, entities have the option to go for a more economical and less intensive choice of assessment of BRSR Reports as an alternative to obtaining assurance. Here are the differences between the two approaches: 

Assessment Assurance Point of difference Sl. No. Assessment is an independent third - party engagement for identifying potential gaps, inconsistencies, weaknesses and areas where further controls may be necessary . Assurance Engagement is an independent third - party engagement in which a practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users other than the responsible party about the sustainability information reported . Definition 1 . Standards that shall be developed by the Industry Standards Forum (ISF) in consultation with SEBI . Standard on Sustainability Assurance Engagements SSAE 3000 issued by ICAI Standards applicable 2 . The procedures involved are less extensive and restricted to verification of data . The cost involved in this engagement is less . Assurance provides a higher level of scrutiny and verification, which enhances the credibility of the disclosed information . Complexity and Cost 3 . Listed entities may opt for assessment FY 2024 - 25 . Value chain partners have to take assessment from FY 2026 - 27 Listed entities may opt for assurance if required by their investors from FY 2024 - 25 Applicability 4 .
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