The Proposed International Standard on Assurance Engagements “ISAE3410, Assurance Engagements on Green House Gas Statements” (Exposure Draft) was approved for publication by the International Auditing and Assurance Standards Board in January 2011. Comments are sought by June 2011.

Many professional accountants practise in the field of assurance on sustainability and similar reports. This exposure draft provides relevant standards specifically designed for such work.

The robustness of carbon taxes or carbon trading schemes is subject to the rigour with which emissions are measured, which in turn is affected by the measurement criteria and the assurance systems used.

In addition to reporting to comply with these taxes / schemes, other significant uses of carbon emissions information include:
* The preparation of GHG statements as part of regulatory disclosure regimes, such as Australia’s National Greenhouse and Energy Reporting Act 2007; and
* To inform investors and others on a voluntary basis. Voluntary disclosures are becoming increasingly common. Such disclosures may be, for example, published as a stand-alone 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.‖

The exposure draft (ED) provides guidance for practitioners in preparing an assurance report on Green House Gas Statements prepared by entities. The ED recognises that practitioners have to select approaches appropriate to the circumstances of the engagement based on assessment of the risks of material misstatement. An explicit risk assessment is necessary and certain procedures cannot be mandated as they are for limited assurance engagement on historical financial information.

Engagements can be for limited assurance or reasonable assurance.

For both engagements, the practitioner’s report is required to include a summary of the practitioner’s procedures.

The ED includes guidance on:

  • Acceptance and Continuance
  • Planning
  • Materiality in Planning and Performing the Engagement
  • Understanding the Entity and its Environment
  • Procedures to Obtain an Understanding and to Identify and Assess Risks
  • Identifying and Assessing Risks of Material Misstatement
  • Overall Responses to Assessed Risks and Further Procedures
  • Using the Work of Competent Practitioners
  • Written Representations
  • Subsequent Events
  • Comparative Information
  • Other Information
  • Documentation
  • Engagement Quality Control Review
  • Forming the Assurance Conclusion
  • Assurance Report Content
  • Other Communication Requirements.

Examples of practitioner’s reports are included in the ED.

For further details, see a copy of the Exposure Draft at the International Federation of Accountant’s website.

Environmental Accounting in Asia and the Pacific

Posted March 09, 2011 kmcgovern

The Confederation of Asian and Pacific Accountants (CAPA), in 2009, surveyed the accounting professional bodies from across the region on “the ways they are addressing the increasingly serious and complex social and environmental issues in today’s world that require the strict attention and concern of businesses and investment communities”.

The report “Main Survey Report on the CAPA Environmental Accounting / CSR Survey” was published in 2009.

In addition to recording the reports on sustainability prepared by the various professional bodies, the report identified the Guidelines / Standards developed by projects of international organizations to be:

(1) IAASB project “Assurance Engagements on Carbon Emissions Information”(CICA, JICPA, NZICA, ICAEW, ACCA, ICAA and CPA Australia)

(2) IFAC-Environmental Management Accounting(JICPA, PICPA)

(3) IFAC-Sustainability Framework (NZICA, JICPA, PICPA, AICPA, ACCA)

(4) Accounting for Sustainability Working Group (JICPA, AICPA, ICAEW, ACCA).

Additionally,  ICAA and CPA Australia are members of the members of the Accounting

Bodies Network.

(5) Carbon Disclosure Project (CICA, JICPA, ICAEW, ACCA)

(6) GRI Sustainability Reporting Guidelines(CPA Australia, CICA, PICPA, ACCA)

(7) AA1000 (ACCA)

(8) United Nations Global Compact (CPA Australia)

The report also identified the guidelines and standards prepared by other domestic organisations. These are contained in the body of the report.

It stated:

“Although a variety of issues are covered in the guidelines and standards developed by each

member body, most issues covered belong to one of the following categories:

  • Environmental issues in accounting
  • Environmental issues in auditing
  • Sustainability or environmental reporting
  • Assurance of sustainability reporting or GHG emissions
  • Sustainability related issues in business and management.

See the full report for details.

Innovative Infrastructure Leadership

Posted February 22, 2011 kmcgovern

Dr. Penny Burns of AMQ International and EAROPH life member, told the  National Infrastructure Summit in Regina, Canada from 26 – 28th January, 2011 that innovative asset management and financing solutions are not enough. We need innovative design to arrive at a new infrastructure that creates value, and is environmentally and financially sustainable. Listen to Dr. Burn’s presentation

Collaboration – How to

Posted February 08, 2011 kmcgovern

Dr. Robyn Keast has worked with the Australian Research Alliance for Children and Youth to prepare face sheets on collaboration.

These fact sheets are a valuable resource and I recommend that readers extend the principles to your areas of interest.

The Institute of Internal Auditors has announced that the International Standards for the Professional Practice of Internal Auditing become mandatory from 1 January 2011.

The purpose of the Standards is to:
1. Delineate basic principles that represent the practice of internal auditing.
2. Provide a framework for performing and promoting a broad range of value-added
internal auditing.
3. Establish the basis for the evaluation of internal audit performance.
4. Foster improved organizational processes and operations.
The Standards are principles-focused, mandatory requirements consisting of:

– Statements of basic requirements for the professional practice of internal auditing and
for evaluating the effectiveness of performance, which are internationally applicable at
organizational and individual levels.

– Interpretations, which clarify terms or concepts within the Statements.

See: The Institute of Internal Auditing – Australia

Study 14 – Transition to the Accrual Basis of Accounting: Guidance for Governments and Government Entities (Third Edition)
This Study is intended to assist governments and government entities wishing to migrate to the accrual basis of accounting in accordance with International Public Sector Accounting Standards (IPSASs). It may also assist governments and government entities complying with the financial reporting requirements of the Cash Basis IPSAS Financial Reporting Under The Cash Basis of Accounting in making the additional encouraged disclosures. 332 pages. Issued January 2011

Kieren and Archbishop Desmond Tutu

Posted January 02, 2011 kmcgovern

Life on Earth – a whole system

Posted December 17, 2010 kmcgovern


Making Peace with the Earth

Posted December 03, 2010 kmcgovern

2010 City of Sydney Peace Prize Lecture, Dr Vandana Shiva

Is it our thoughts that cause environmental degradation? If so, we can change our thoughts. Over those we have control. Was the green revolution a mistake? Did it destroy agricultural diversity?

Dr Shiva states: “If commerce starts to undermine life support, then commerce must stop, because life must carry on.”

Bhutan is measuring gross national happiness as its official indicator, having rejected gross domestic product (GDP) as being “heavily biased towards increased production and consumption, regardless of the necessity or desirability of such outputs, at the expense of other more holistic criterion”.

Bolivia has prepared a declaration of the rights of mother earth and is working to have it adopted by the United Nations as a universal declaration of the rights of mother earth.

World Congress of Accountants 2010

Posted November 23, 2010 kmcgovern

Kerry McGovern attended the World Congress of Accountants in Kuala Lumpur in November. The key message she brought away from the congress was the plea to develop the skills to help organisations identify and manage their use of resources using a much broader definition of resources. The tools include the integrated reporting process of the International Integrated Reporting Committee (IIRC), the International Federation of Accountants’ (IFAC’s) sustainability reporting framework and the Worldbank’s sustainability framework.

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