Assurance on a Greenhouse Gas Statement

Status: Monitoring IAASB’s activities.

Objective and Scope of this Project
Background
Issues
Activities to Date
Next Steps
Contact Information

Objective and Scope of this Project

The objective of this project is to develop a new Canadian Standard on Assurance Engagements (CSAE) that addresses professional accountants' responsibilities when providing assurance on information in a Greenhouse Gas (GHG) Statement.

Background

Increasing attention is being given to the link between GHGs and climate change.  Many entities are quantifying their GHG emissions for internal management purposes, and an increasing number are also preparing a GHG statement:

• as part of a regulatory disclosure regime;
• as part of an emissions trading scheme; or
• to inform investors and others on a voluntary basis about the entity’s GHG emissions.

For example, voluntary disclosures may be published as a standalone document, included as part of a broader sustainability report or in an entity's annual report, or made to support inclusion in a "carbon register".

There is also an increasing demand for assurance on GHG information. The International Auditing and Assurance Board (IAASB) is developing a new International Standard on Assurance Engagement (ISAE) on this topic. Unlike the International Standards on Auditing (ISAs), the AASB is not committed to adopting ISAEs.  However, the AASB intends to adopt the ISAE on GHG information if the AASB determines that it is appropriate for use in Canada.  If the AASB adopts the ISAE on GHG information, amendments, if any, that the AASB would make to the ISAE wording would be in accordance with the AASB’s criteria for amendments to International Standards on Auditing, as set out in Appendix 1 of the Preface to the CICA Handbook – Assurance.

At each stage of review of the IAASB material, the AASB provides input to the IAASB member nominated by the CICA regarding the international assurance engagement standard project for discussion at the upcoming IAASB meeting.

Issues

Key issues that this ISAE project plans to address include:

Suitability of criteria

• What are the characteristics of suitable criteria to evaluate GHG statements (for example, relevance, completeness, reliability, neutrality and understandability)?
• How should the characteristics be applied to determine whether a particular set of criteria is suitable?
• Should the ISAE specifically name any particular sets of criteria that have achieved general acceptability?
    

Using the work of an expert

• How can the engagement team best obtain access to the environmental, scientific and engineering expertise required to perform assurance engagements focused on various types of GHG information?

Level of assurance

• Should the ISAE address both reasonable assurance and limited assurance engagements?

Evidence gathering procedures

• What are the risk factors professional accountants should consider when providing assurance on GHG statements?
• What requirements and guidance are needed on the nature, timing and extent of procedures?

Form and content of the assurance report

• What should be the form and content of the assurance report?
   

Activities to Date

In June 2010, the AASB approved a project proposal to assess the adoption of the proposed ISAE on assurance on greenhouse gas statement for use in Canada.

In January 2010, the AASB considered responses from Canadian stakeholders to its Request for Input, and responded to the IAASB’s Consultation Paper.

In October 2009, the AASB published a Request for Input on the IAASB’s Consultation Paper.

In September 2009, the AASB reviewed the IAASB issues paper and a Consultation Paper on assurance on greenhouse gas statement.

In June 2009, the AASB reviewed the IAASB issues paper and a draft of the proposed ISAE.

In December 2008, the AASB reviewed the IAASB issues paper for the proposed ISAE on assurance on greenhouse gas statement.

In December 2007, the AASB reviewed the IAASB’s project proposal to develop an ISAE on assurance on greenhouse gas statement.

IAASB’s Discussions to Date

Background papers that are the basis of the IAASB’s discussions, along with meeting summaries and audio recordings of the actual discussions, can be accessed on the IAASB’s website by clicking here and then on the date of the meeting at which matters pertaining to a project were discussed.

Next Steps

The following summarizes the AASB’s planned activities:

The AASB’s planned activities beyond this point are dependent on the IAASB’s timing of the project, which has not yet been finalized.

Contact Information

Staff contact: Chi Ho Ng, CA
Phone no.: +1 (416) 204-3443