Auditors Propose Standard on Greenhouse Gas Statements

The International Auditing and Assurance Standards Board (IAASB) has released for comment the proposed International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements.


“The monetary value of carbon trading transactions around the world is in the billions and continuing to increase exponentially. This has led to a strong and growing need for mechanisms to enhance the reliability of the underlying information used in these transactions—and this proposed standard is an important part of fulfilling that need,” says Prof. Arnold Schilder, IAASB chairman. “Disclosure of emissions information is also increasingly being required by regulation or presented on a voluntary basis to inform investors, consumers, and others,” Schilder adds. “For example, it is becoming more common to include detailed emissions information in company sustainability reports. Providing assurance to enhance the reliability of information for regulatory and voluntary reporting is also important.”


Proposed ISAE 3410 has been developed through a robust program of consultation, including a series of global roundtables and feedback received on an earlier Consultation Paper. The proposed standard addresses the practitioner’s responsibilities in identifying, assessing, and responding to risks of material misstatement, and contains illustrative assurance reports on greenhouse gas statements. The proposed requirements and guidance also recognize that most engagements will be undertaken by a multidisciplinary team, so they address the need for the assurance practitioner to integrate experts—in engineering or environmental science, for example—into various stages of the engagement.


“The proposed standard can be applied to a broad range of circumstances, including emissions from electricity used at a single office; emissions from complex physical or chemical processes at several facilities; or emissions calculated using information from multiple entities in a supply chain,” explains IAASB Technical Director James Gunn. “Importantly, the proposed standard covers both ‘reasonable assurance’ and ‘limited assurance’ engagements for both of which demand is increasingly evident in the marketplace.”




Suggested Articles

Some of you might have already been aware of the news that Questex—with the aim to focus on event business—will shut down permanently all media brands in Asia…

Some advice for transitioning into an advisory role

Global risks are intensifying but the collective will to tackle them appears to be lacking. Check out this report for areas of concern