Custody of Client Assets

Introduction

5350.1 Sustainability assurance providers are required to comply with the fundamental principles and apply the conceptual framework set out in Section 5120 to identify, evaluate and address threats. 5350.2 Holding client assets creates a self-interest or other threat to compliance with the principles of professional behavior and objectivity. This section sets out specific requirements and application material relevant to applying the conceptual framework in such circumstances.

Requirements and Application Material

Before Taking Custody

R5350.3

A sustainability assurance provider shall not assume custody

of money or other assets belonging to a sustainability assurance client unless permitted to do so by law and in accordance with any conditions under which such custody may be taken.

R5350.4

As part of client and engagement acceptance procedures

related to assuming custody of money or assets belonging to a sustainability assurance client, a sustainability assurance provider shall:

(a)

Make inquiries about the source of the assets; and

(b)

Consider related legal and regulatory obligations. 5350.4 A1 Inquiries about the source of assets belonging to a sustainability assurance client might reveal, for example, that the assets were derived from illegal activities, such as money laundering.

After Taking Custody

R5350.5

A sustainability assurance provider entrusted with money or

other assets belonging to a sustainability assurance client shall:

(a)

Comply with the laws and regulations relevant to holding and accounting for the assets;

(b)

Keep the assets separately from personal or firm assets;

(c)

Use the assets only for the purpose for which they are intended; and

(d)

Be ready at all times to account for the assets and any income, dividends, or gains generated, to any individuals entitled to that accounting.

INDEPENDENCE STANDARDS FOR SUSTAINABILITY ASSURANCE

ENGAGEMENTS