International


The International Auditing and Assurance Standards Board (IAASB) in January released a proposed standard to provide assurance on companies’ reporting of greenhouse gas emissions, a key component in sustainability reporting.

 

The IAASB said the proposed International Standard on Assurance Engagements (ISAE) 3410, Assurance Engagements on Greenhouse Gas Statements, addresses the practitioner’s responsibilities in identifying, assessing and responding to risks of material misstatement and contains illustrative assurance reports on greenhouse gas statements. Comments on the ED are due June 10.

 

“In the United States, Statement of Position (SOP) 03-2, Attest Engagements on Greenhouse Gas Emissions Information, provides guidance on the application of the AICPA Attestation Standards for an examination of GHG emissions information,” said Chuck Landes, AICPA vice president–Professional Standards and Services. “This proposed IAASB standard fills a gap in the international standards literature by providing specific guidance for GHG emissions engagements. It also covers limited assurance engagements in addition to reasonable assurance engagements.”

 

“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,” said IAASB Chairman Arnold Schilder in a press release. “Disclosure of emissions information is also increasingly being required by regulation or presented on a voluntary basis to inform investors, consumers and others.”

 

“Most large companies already report voluntarily on their greenhouse gas emissions,” said Ken Witt, an AICPA technical manager who leads the Institute’s sustainability initiative. “As the focus on environmental performance increases, we expect that the demand for assurance engagements on greenhouse gas emissions information and all reported sustainability information will also increase.”

 

The IAASB is an independent standard- setting board operated by the International Federation of Accountants, of which the AICPA is a member. IAASB standards must be adopted by the AICPA or the PCAOB to be authoritative in the U.S.

 

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