# Materiality Under ISSA 5000: How Assurers Apply It, Including Double Materiality

> Your materiality assessment and your assurer's materiality are different. How ISSA 5000 treats qualitative and quantitative disclosures and double materiality.

**Source:** https://www.esgweise.com/insights/issa-5000-materiality-double-materiality/
**Author:** Sumit Agarwal
**Published:** 2026-10-24
**Frameworks:** ISSA 5000, IFRS S1, IFRS S2, ESRS, GRI
**Countries:** Global, UAE, KSA, Qatar, Oman

---

## Key points

- There are two materialities in a sustainability assurance engagement: the company's process to decide what to report, and the assurer's thresholds for deciding whether what is reported is materially misstated.
- ISSA 5000 requires the assurer to consider materiality for qualitative disclosures and to determine a quantified materiality for quantitative disclosures.
- There is no single materiality for the whole report. The assurer sets multiple materialities for different disclosures or groups of disclosures.
- Performance materiality, set below materiality, guards against several small undetected errors adding up to a material one, for example across sites.
- Where the framework requires both financial and impact materiality, the assurer must take both perspectives into account when setting materiality.

---

## Introduction

"Materiality" means two different things in a sustainability assurance engagement, and confusing them causes real problems. Companies often assume that because they ran a thorough materiality assessment, the assurer has nothing more to decide on materiality. Under [ISSA 5000](/insights/issa-5000-sustainability-assurance-standard-explained/) the assurer applies its own materiality throughout the engagement, separately from the company's.

This article explains how, drawing on ISSA 5000 paragraphs 98 to 102 and the IAASB's June 2026 FAQ on materiality.

## Two materialities

| | The company's materiality | The assurer's materiality |
|---|---|---|
| ISSA 5000 term | The entity's process to identify sustainability information to be reported | Materiality for qualitative and quantitative disclosures |
| Purpose | Decide which topics and information go into the report | Plan the work and judge whether misstatements are material |
| Set by | Management, under the reporting framework | The practitioner, using the framework as a frame of reference |
| Result | The content of the report | The extent of testing and the conclusion |

The assurer must **understand** the company's process, as part of understanding the information system, and evaluate whether the system supports preparation in line with the framework (paragraphs 117(a) and 118). It does not redo the assessment. But the IAASB is clear that the company's process is not the basis for deciding whether the report achieves fair presentation. Where a framework aims at fair presentation, management may need to report more than the framework specifically lists.

The assurer assesses the information against the reporting framework's criteria, including any materiality thresholds or considerations in that framework. Where a framework says nothing on materiality, ISSA 5000 paragraph A296 gives the principles the assurer applies instead.

## Qualitative and quantitative disclosures

ISSA 5000 treats the two kinds of disclosure differently (paragraph 98):

- For **qualitative disclosures**, such as governance arrangements, policies, risk descriptions and transition plan narrative, the assurer **considers** materiality. It reflects on the factors that could make a misstatement material: an omission, a misleading emphasis, a statement that obscures. There is no numeric threshold.
- For **quantitative disclosures**, such as emissions, energy, water, injury rates and financed emissions, the assurer **determines** materiality: a quantified threshold for the size of misstatement regarded as material.

The assurer documents the factors it considered for qualitative disclosures and the basis for each quantified materiality (paragraph 102).

## Multiple materialities, not one

In a financial statement audit, one overall materiality figure anchors the work. That does not work for a sustainability report covering tonnes of CO2e, cubic metres of water, injury frequency rates and narrative on human rights. The IAASB's June 2026 FAQ is explicit: determining materiality for the information as a whole is impracticable, and an engagement ordinarily involves **multiple materialities**.

The assurer groups disclosures to set them. The grouping can follow how management presents the information, how the framework requires it to be disaggregated, or another logical basis such as common attributes, locations or risk profiles. The IAASB's examples:

- **Can be grouped:** Scope 1 emissions across facilities in the same industry, measured in tCO2e.
- **Should not be grouped:** financed emissions the framework requires by industry; policies alongside performance metrics; human rights across components where grouping would hide site-specific issues.

Materiality relates only to the information within the scope of the engagement. If only part of the report is assured, materiality is set in relation to that part.

## Performance materiality

For quantitative disclosures the assurer must also determine **performance materiality** (paragraph 100): an amount below materiality, designed to reduce aggregation risk, the chance that several undetected errors together exceed materiality.

The IAASB's FAQ illustrates it with Scope 1 emissions at three locations carrying undetected errors of 1,100, 600 and 550 tCO2e, against a materiality of 1,000 tCO2e:

| Approach | What is detected |
|---|---|
| Procedures designed at materiality of 1,000 tCO2e | Only the 1,100 tCO2e error. The other two, together 1,150 tCO2e and above materiality, are missed |
| Procedures designed at performance materiality of 500 tCO2e | All three errors |

Where a disclosure is a single figure tested as one population, with no aggregation risk, performance materiality can equal materiality. ISSA 5000 does not require component performance materiality in group engagements, though the assurer may set it where needed.

A multi-site company should expect its assurer to test below the headline threshold. Small errors at each site add up.

## Double materiality

Some frameworks, ESRS among them, require reporting from two perspectives: how sustainability matters affect the company (financial materiality) and how the company affects the environment, society and the economy (impact materiality). IFRS S1 and S2 apply financial materiality, and GRI applies impact materiality.

Where the framework requires both, ISSA 5000 requires the assurer to **take both perspectives into account** when considering or determining materiality (paragraph 99). A misstatement in a water withdrawal figure may be immaterial to an investor's view of enterprise value, yet material to users concerned with the company's impact on a stressed catchment. Under a double materiality framework, the assurer has to weigh both.

For companies preparing a [double materiality assessment](/services/double-materiality/), the practical consequence is that impact-related metrics will not be treated as lower priority by the assurer simply because their financial effect is small.

## Materiality moves during the engagement

The assurer must revise materiality if it learns something during the engagement that would have led to a different figure at the start (paragraph 101). An acquisition, a restated baseline or a change in user needs can all move the threshold, and the testing with it.

## When one disclosure is wrong

At the end, the assurer evaluates uncorrected misstatements against materiality, individually and in aggregate. The IAASB's FAQ is direct about the consequence: if a material misstatement in a single disclosure stays uncorrected, the conclusion must be modified. If it is material but not pervasive, the conclusion is **qualified**.

The FAQ's example is a report of more than 250 pages under limited assurance, with water consumption materially understated because a source was excluded. Management declines to correct it. Everything else is clean. The report is still qualified.

## What companies should do

- **Keep the materiality assessment and the assurance scope separate in your planning.** The first decides content. The second decides testing.
- **Present disclosures at the level the framework requires.** Grouping that hides site or segment variation can itself be a misstatement.
- **Expect site-level testing for multi-site metrics.** Clean up the smallest sites as well as the largest.
- **Treat impact metrics as seriously as financial ones** under a double materiality framework.
- **Correct identified misstatements.** An uncorrected material error in one metric qualifies the whole conclusion.

## How ESGweise helps

ESGweise prepares double materiality assessments and runs ISSA 5000 readiness reviews that test disclosures at the thresholds an assurer is likely to apply, so misstatements are found and corrected before the assurer's fieldwork. See our [assurance](/services/assurance/) and [double materiality](/services/double-materiality/) services, and the [readiness checklist](/insights/issa-5000-readiness-checklist-for-companies/).

## Sources

- IAASB, *ISSA 5000, General Requirements for Sustainability Assurance Engagements*, November 2024, paragraphs 98 to 102, 117 and 118.
- IAASB staff, Frequently Asked Questions: The Application of Materiality under ISSA 5000, June 2026, Q2, Q3, Q4, Q8, Q10, Q11, Q12, Q16 to Q19, Q21.
- IAASB, ISSA 5000 Implementation Guide, January 2025, Parts B and E.

---

## Frequently asked questions

### Is the assurer's materiality the same as our materiality assessment?

No. The company's materiality assessment, which ISSA 5000 calls the entity's process to identify sustainability information to be reported, decides what goes in the report. The assurer's materiality is a threshold for planning the work and judging whether misstatements in what was reported could influence users' decisions. The assurer must understand the company's process but applies its own materiality.

### Does the assurer set one materiality figure for the whole report?

No. The IAASB's June 2026 FAQ explains that determining materiality for the sustainability information as a whole is impracticable, because disclosures cover different topics, units and user needs. An engagement ordinarily involves multiple materialities, considered or determined for different disclosures or groups of disclosures.

### What is performance materiality?

An amount set below materiality for a quantitative disclosure, so that the assurer's procedures pick up individually small misstatements that could add up to a material one. Where a disclosure is tested as a single population with no aggregation risk, performance materiality can equal materiality.

### How does double materiality affect assurance?

If the reporting framework requires the entity to apply both financial materiality and impact materiality, ISSA 5000 paragraph 99 requires the assurer to take both perspectives into account when considering or determining materiality. A misstatement can be material because it matters to investors, or because it matters to people affected by the company's impacts.

### Can one misstated disclosure affect the whole assurance report?

Yes. If a material misstatement in a single disclosure remains uncorrected, the assurer must modify its conclusion. If the misstatement is material but not pervasive, the result is a qualified conclusion on the sustainability information subject to assurance.


---

Published by ESGweise Global LLC, Dubai. https://www.esgweise.com