ICAP CFAP CFAP-3: Sustainability Reporting and Assurance Syllabus

CFAP-3: Sustainability Reporting and Assurance syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for CFAP-3: Sustainability Reporting and Assurance in ICAP CFAP, not a summary of it.

1. 1

   Sustainability-related Disclosure Concepts

   8 topics

   • Objective, Scope and Definitions (IFRS S1)
   • Conceptual Foundations
   • Core Content Pillars
   • General Requirements and Statement of Compliance
   • Judgments, Uncertainties and Errors
   • Qualitative Characteristics of Useful Information
   • Effective Date and Transitional Provisions
   • Local Sustainability Regulations and Policies
2. 2

   Climate-related Disclosures

   3 topics

   • Objective, Scope and Defined Terms (IFRS S2)
   • Core Content for Climate Reporting
   • Application Guidance
3. 3

   SASB Standards

   2 topics

   • Principles and Concepts of SASB Standards
   • Industry-specific Disclosure Topics and Metrics
4. 4

   Assurance-related Considerations

   2 topics

   • Sustainability Assurance Engagements (ISSA 5000)
   • International Ethics Standards for Sustainability Assurance

CFAP-3: Sustainability Reporting and Assurance flashcards for ICAP CFAP

24 of 51 cards from the CFAP-3: Sustainability Reporting and Assurance deck — real questions with worked answers.

1. What is the objective of IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information)?

   To require an entity to disclose information about its sustainability-related risks and opportunities that is useful to primary users of general purpose financial reports in deciding whether to provide resources to the entity.

2. Who are the 'primary users' of sustainability-related financial disclosures under IFRS S1?

   Existing and potential investors, lenders and other creditors.

3. Under IFRS S1, what is the scope of sustainability-related risks and opportunities an entity must report?

   Only those that could reasonably be expected to affect the entity's cash flows, access to finance or cost of capital over the short, medium or long term (its prospects).

4. How does IFRS S1 define 'sustainability-related financial information'?

   Information about an entity's sustainability-related risks and opportunities that is useful to primary users in making decisions relating to providing resources to the entity.

5. What does IFRS S1 mean by the 'reporting entity'?

   Sustainability-related financial disclosures must be for the same reporting entity as the related financial statements.

6. Under IFRS S1, what are the four content areas (pillars) that disclosures must cover?

   Governance, Strategy, Risk Management, and Metrics & Targets.

7. What must be disclosed under the 'Governance' pillar of IFRS S1?

   The governance processes, controls and procedures used to monitor, manage and oversee sustainability-related risks and opportunities, including the body/individuals responsible and management's role.

8. What must be disclosed under the 'Strategy' pillar of IFRS S1?

   The entity's strategy for managing sustainability-related risks and opportunities, including their effects on the business model, value chain, financial position, financial performance, cash flows, and resilience.

9. What must be disclosed under the 'Risk Management' pillar of IFRS S1?

   The processes used to identify, assess, prioritise and monitor sustainability-related risks and opportunities, and whether/how those processes are integrated into overall risk management.

10. What must be disclosed under the 'Metrics and Targets' pillar of IFRS S1?

    Metrics and targets used to measure and monitor performance on sustainability-related risks and opportunities, including progress against targets and metrics required by applicable IFRS Sustainability Disclosure Standards.

11. What is the 'conceptual foundation' regarding fair presentation in IFRS S1?

    A complete set of sustainability-related financial disclosures must present fairly all sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects, requiring faithful representation in accordance with the qualitative characteristics.

12. What does the concept of 'value chain' mean in IFRS S1?

    The full range of interactions, resources and relationships related to an entity's business model and external environment, spanning from raw materials sourcing to delivery, use and end-of-life of products/services (upstream and downstream).

13. What is the 'General Requirement' in IFRS S1 regarding the source of guidance when no specific IFRS Standard applies?

    An entity must consider the SASB Standards, then may consider CDSB guidance, other standard-setters' pronouncements with similar objectives, and other entities' practices in the same industry/region.

14. What is required for an explicit and unreserved 'statement of compliance' under IFRS S1?

    An entity whose disclosures comply with all requirements of IFRS Sustainability Disclosure Standards must make an explicit and unreserved statement of compliance, and must not do so unless it complies with ALL requirements.

15. Under IFRS S1, can connectivity be made between sustainability disclosures and financial statements?

    Yes. The information must be connected so users can understand the connections between items, and data/assumptions must be consistent (to the extent possible) with those used in the related financial statements.

16. How does IFRS S1 treat 'judgements' in preparing disclosures?

    An entity must disclose information that enables users to understand the judgements, made in the preparation process, that have the most significant effect on the amounts disclosed.

17. How does IFRS S1 require disclosure of measurement 'uncertainties'?

    An entity must disclose information enabling users to understand the most significant uncertainties affecting the amounts disclosed, including the sources of measurement uncertainty and assumptions/approximations used.

18. How are 'errors' from prior periods treated under IFRS S1?

    Material prior period errors must be corrected retrospectively by restating comparative amounts, unless it is impracticable to do so.

19. What are the two fundamental qualitative characteristics of useful sustainability-related financial information under IFRS S1?

    Relevance and faithful representation.

20. What are the four enhancing qualitative characteristics of useful information under IFRS S1?

    Comparability, Verifiability, Timeliness, and Understandability.

21. What three components make information a 'faithful representation' under IFRS S1?

    It must be complete, neutral and accurate (free from error).

22. Under IFRS S1, when must sustainability-related financial disclosures be reported relative to the financial statements?

    At the same time as the related financial statements (same reporting period), and the disclosures form part of general purpose financial reports.

23. What transitional relief did IFRS S1 provide for the first annual reporting period?

    An entity may report only climate-related risks and opportunities (IFRS S2) in the first year ('climate-first' relief), deferring other sustainability disclosures, and is exempt from providing comparative information in the first year.

24. What was the effective date of IFRS S1 and S2?

    Annual reporting periods beginning on or after 1 January 2024, with earlier application permitted (provided IFRS S2 is also applied).

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