Reframing Audit Risk and Professional Judgment in Sustainability-Oriented Double Materiality Assurance
Keywords:
Double materiality assurance, Sustainability assurance, Audit risk, Professional judgment, ISAE 3000Abstract
Purpose
This study examines how the emergence of sustainability-oriented double materiality reshapes audit risk assessment and auditors’ professional judgment within assurance engagements. Moving beyond disclosure-focused and audit-centric approaches, the study positions double materiality as a subject of assurance rather than merely an object of audit procedures.
Methodology
The study adopts a conceptual–analytical methodology grounded in auditing theory, sustainability reporting regulation, and international assurance standards, particularly ISAE 3000 (Revised). Relevant academic literature and regulatory frameworks on double materiality are critically synthesized.
Design and Approach
A structured assurance framework is developed to explain how impact materiality and financial materiality interact within sustainability contexts and how this interaction reconfigures audit risk identification, evidence evaluation, and professional judgment. The framework emphasizes pre-assurance planning as well as assurance execution stages.
Findings
The analysis shows that sustainability-oriented double materiality significantly expands the traditional audit risk model, increases uncertainty and subjectivity in evidence assessment, and intensifies reliance on auditors’ professional judgment across extended time horizons.
Originality and Value
This study provides an original contribution by shifting the focus from auditing sustainability disclosures to assuring the double materiality determination process itself. It offers one of the first assurance-based conceptualizations of double materiality aligned with ISAE 3000.
Theoretical, Practical, and Social Implications
The study advances auditing theory by reframing materiality as a dynamic assurance concept. Practically, it supports auditors and regulators in designing robust sustainability assurance engagements. Socially, it enhances the credibility of sustainability-related information and stakeholder confidence.
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