ICAEW ACA (Associate Chartered Accountant), Next Generation syllabus · Sustainability and Ethics
ICAEW SE The professional accountant in sustainability: practice questions with answers
3 free exam-style questions on The professional accountant in sustainability for ICAEW SE Sustainability and Ethics. Try each one, then open the answer to read the explanation. Fincora has 15 original questions on this syllabus area.
Question 1
Which of the following statements about UK SRS S1 and UK SRS S2 is correct?
- A They require a double materiality assessment like the one in the ESRS
- B They form part of the UK Corporate Governance Code 2024 and apply to all companies that follow it
- C They are based on IFRS S1 and S2 with limited UK changes, and are voluntary unless regulation applies them
- D They were issued by the FRC as part of UK GAAP and are mandatory for all large private companies from 2027
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Answer: C. UK SRS S1 and UK SRS S2 were published by the UK government on 25 February 2026. They are based on the ISSB's IFRS S1 and IFRS S2, with limited UK amendments.
They are voluntary unless a regulator or legislation requires their use. The FCA's PS26/19 applies them to in-scope listed companies on a comply-or-explain basis for periods beginning on or after 1 January 2027. Any requirement for private companies has not been decided.
The UK Corporate Governance Code 2024 is a separate FRC code, applying from 1 January 2025, on comply-or-explain principles of board leadership, accountability, audit, risk and internal control (with Provision 29 on material internal controls from 1 January 2026).
Question 2
Which of the following best describes the role of ICAEW in driving sustainability?
- A It builds sustainability into its qualifications, CPD and guidance, and contributes to policy and standard setting
- B It sets the UK's mandatory sustainability reporting standards that apply to listed companies through the listing rules
- C It enforces the FCA's anti-greenwashing rule against authorised firms that make misleading sustainability claims
- D It issues ISSA (UK) 5000, the standard that UK practitioners use for sustainability assurance engagements
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Answer: A. Accountancy bodies such as ICAEW help drive sustainability by:
- building sustainability into their qualifications (this Sustainability and Ethics module is an example) and members' CPD;
- publishing guidance, resources and thought leadership for members in business and practice;
- responding to consultations and working with governments, regulators and standard setters such as the ISSB and the FRC;
- supporting members to act as data stewards, CFOs, advisers and assurers.
Standard setting and enforcement sit elsewhere: the UK government published UK SRS, the FCA sets listing rules and the anti-greenwashing rule, and the FRC issued ISSA (UK) 5000.
Question 3
Which of the following statements about sustainable practices in a professional accountancy firm is correct?
- A Because an accountancy firm does no manufacturing, its supply chain emissions are negligible and need not be considered
- B Cutting energy use and business travel can reduce costs as well as emissions, supporting the firm's resilience
- C Sustainable practices always increase a firm's costs, so their only benefit to the firm is reputational
- D Hybrid working always reduces a firm's total emissions, because staff no longer commute every day
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Answer: B. Economic sustainability means a business can keep operating and creating value over the long term. Sustainable practices often support it:
- energy efficiency and less travel cut costs as well as emissions;
- good people practices help recruitment and retention;
- clients increasingly expect their advisers to act sustainably, and may ask about it in tenders.
These benefits reach the firm's stakeholders: owners (stronger finances), staff (security, wellbeing), clients (stable service and fees) and communities. A professional services firm's footprint is mostly Scope 2 and Scope 3 (energy, purchased goods and services, IT, travel), so its supply chain cannot be ignored. Measures such as hybrid working need to be assessed on their overall effect rather than assumed to help.
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