AA1000 Assurance Standard

The AA1000 Assurance Standard (AA1000 AS) is a standard for assessing and strengthening the credibility and quality of an organisation’s social, economic and environmental reporting. It is primarily intended for use by external auditing bodies that assure an organisation’s reports or social accounts (Assurance Providers) but can also be used to guide any organisation when building its accountability processes, systems and abilities .

Stakeholder engagement is central to the AA1000 AS. Within organisations it is used as a means of driving overall performance through innovation and learning. ‘Quality’ in terms of the AA1000 AS is the degree to which a reporting organisation is open, engaging and responsive to stakeholder perceptions and expectations.

AA1000 AS is built on two beliefs. First, that accountability processes need to be tailored to identify, understand and respond to issues that are specific to diverse organisations, sectors, stakeholders and strategies. Secondly, that robust, good quality stakeholder engagement processes can powerfully inform internal decision making and enable learning and innovation and thus improved performance.

AA1000 AS was created by the not-for-profit professional institute, AccountAbility, which offers assurance-related services to its members through working in partnership.

Summary

AA1000 AS is a non-prescriptive, free, open-source standard that originated as part of the ‘social accounting and auditing’ movement (see Social Accounting). Key features of AA1000 AS are:

  • An overarching principle of ‘inclusivity’, known as ‘the accountability commitment’, which underpins three principles – materiality, completeness and responsiveness.
  • Public assurance statements.
  • Requirement of disclosure by assurance practitioner about their independence (impartiality) and competencies.

AccountAbility has taken an approach to quality focused on the interests of the stakeholder, or those impacted by the organisation. For business, this would include employees and owners, as well as those stakeholders who historically have had little influence over decision-making and yet are impacted, often profoundly, by business activities.

The AA1000 series defined this in terms of the principle of ‘inclusivity’ understood as the right of stakeholders’ interests to be heard, and that organisations account for themselves in relation to these interests. AA1000 AS distilled this into an ‘accountability commitment’ and three, related, core over-arching principles: materiality, completeness and responsiveness. Of these, the most significant is ‘materiality’, defined in terms of stakeholder interests.

The Materiality Principle requires the organisation to include in its report information about its social, environmental and economic performance required by its stakeholders for them to be able to make informed judgements, decisions and actions. It focuses on what is important to stakeholders, as well as what is important to the organisation. Information is ‘material’ if its omission or misrepresentation in the report could influence the judgments, decisions and actions of an organisation’s stakeholders.

The Responsiveness Principle requires an organisation to provide evidence that it has coherently responded to stakeholder concerns, policies and relevant standards – this includes public response but also management of identified material issues i.e., improving performance.

All AA1000 principles must be applied by any organisation wishing to use the Standard. The manner in which they are applied depends on the level of assurance pursued and the context and resources of the organisation using them. Assurance levels may depend on the extent and quality of a number of issues:

• Available information.
• Quality of evidence.
• Maturity of the accountability systems and processes.
• Internal assurance systems.
• Existing assurance for specific aspects of performance reporting.
• Resources allocated for assurance by the reporting organisation.
• Legal or commercial constraints.
• Competencies of the assurance practitioner.

The level of assurance is expected, although not required, to increase over time as information and underlying systems and processes for accounting for performance mature.

PLEASE NOTE:


See www.accountability.org for more details.

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