Auditing

ROGER SIMNETTAND MICHAEL NUGENT

FORUM: ACCOUNTINGAUDITING AND STANDARDS BOARDS

DEVELOPING AN ASSURANCE STANDARD FOR CARBON EMISSIONS DISCLOSURES

n 2004 the International Auditing and Assurance Standards Board (IAASB) released the “International Framework for Assurance Engagements”, the Australian equivalent of which is AUS 108 Framework for Assurance Engagements. According to this framework, two of the elements necessary for an assurance engagement are the subject matter and suitable criteria by which the subject matter is measured and evaluated. While this framework provides the basis on which assurance on a broad range of subject matter can be offered by auditors, the auditing profession has struggled to develop an assurance standard on the subject matter of sustainability reporting because of the difficulty of knowing the form this reporting should take. Recognising the difficulties associated with a general sustainability assurance service, this paper advocates the development of an assurance standard on the specific issue of corporations’ carbon emissions. A number of recent initiatives in sustainability reporting are a result of growing awareness and concern about the environmental and social impacts of corporations. Sustainability reporting includes information about a company’s impacts on society and the environment. Relevant disclosures may appear as part of the annual report, in stand-alone sustainability reports or in databases such as the Carbon Disclosure Project (http:// www.cdproject.net). For example, at the international level there has been a new generation of reporting activities associated with the Global Reporting Initiative and United Nations working groups. There have also been advances in the assurance of sustainability disclosures both at an international and national level. The Global Reporting Initiative (GRI) Guidelines are widely regarded as the leading reporting criteria for sustainability reports. A revised version of the...