Assurance Standards Briefing: AA1000 Assurance Standard & ISAE3000

This brief gives an overview of the content and application of the AA1000 Assurance Standard (AA1000AS) launched in March 2003 by AccountAbility and the IAASB’s International Standard on Assurance Engagements (ISAE3000), which from January 1st 2005 all professional accounting networks have to be compliant with. Both standards have been developed as assurance frameworks for verifying the credibility of non-financial reports.

The brief examines whether the two standards, which have actually been designed to address different objectives, are consistent, complementary or conflicting, and in what ways they offer similar or different value in the assurance process and its impact on the behaviour of the intended users.

Findings of the brief are:

• assurance based on the combined use of AA1000AS and ISAE3000 is likely to deliver enhanced results; this includes the approach, methodology and conclusion, their communication, credibility, and so ultimately the outcome in relation to stakeholder trust and behaviour
• assurance based on either AA1000AS or ISAE3000 alone is unlikely to deliver the same results
• ISAE3000 and AA1000AS have considerable, but very different types of legitimacy: both have been developed through consultation processes, the former produced from the background of audits of financial statements, the latter drawing on a broader constituency of the professions, the business community and their stakeholders.

The brief also highlight several conditions that need to be fulfilled to secure effective assurance, including:

• convergence of financial and non-financial assurance methodology and practice
• assurance oriented towards, and satisfying, diverse stakeholders
• convergence of civil and professional credibility of assurance
• the credibility of assurance practitioners in terms of their independence, impartiality and competence