The International Auditing and Assurance Standards Board has released a new standard to assure public confidence in reliable emissions reporting.
The new International Standard on Assurance Engagements 3410,
“Today, there is clear and growing demand for companies to disclose their environmental impacts and initiatives and to report detailed emissions information, often through GHG statements. As this demand increases, public confidence in assured GHG emissions information becomes more significant, if not essential,” said IAASB chairman Arnold Schilder in a statement. “In promulgating this new standard, the IAASB seeks to enhance the consistency and quality of assurance engagements on GHG information, recognizing the importance to the public interest of decisions being made on the basis of that information.”
The new ISAE 3410 addresses practitioners’ responsibilities in identifying, assessing, and responding to risks of material misstatement when engaged to report on GHG statements. It sets out requirements and guidance on the work effort and reporting responsibilities of practitioners for both reasonable and limited assurance engagements, as demand for both is increasingly evident in the marketplace. The ISAE is applicable to a broad range of situations, from emissions from electricity used at a single office, to emissions from complex physical or chemical processes at several facilities across a supply chain.
Corporate sustainability reporting on issues such as greenhouse gas emissions is on the rise. A recent survey by the United Nations’ Global Compact found that Global Compact participants submitted a total of 4,150 reports in 2011, contributing to what is now the world’s most extensive collection of corporate sustainability communications, with a total of nearly 14,000 reports.
”ISAE 3410 is a landmark standard in many respects,” said IAASB technical director James Gunn. “It responds to societal demands for standards that support quality in assurance services in areas other than financial reporting. It deals with engagements that largely need to be undertaken by a multidisciplinary team, where the assurance practitioner needs to integrate experts—in engineering or environmental science, for example—into various stages of the engagement.
Notably, it also covers reporting for both reasonable and limited assurance engagements. It provides illustrative reports with features that distinguish for readers the difference between reasonable and limited assurance engagements, and shows how limited assurance reports may be further tailored to enhance users’ understanding of the assurance obtained.”
