AUASB Consultation: Assurance over climate and other sustainability information

On 3 May 2024, the AICD made a submission to the Auditing and Assurance Standards Board (AUASB)’s consultation on assurance over climate and other sustainability information.

The AICD reiterated its support for high-quality, useful and comparable climate disclosures.  Assurance by a suitably qualified and independent external practitioner plays a critical role in the climate reporting regime by increasing market confidence in the quality and reliability of climate disclosures.

The AICD’s key points were:

  1. There needs to be alignment between the phase-in of mandatory assurance over forward-looking disclosures and the expiry of the Modified Liability and Qualified Director regimes under the climate reporting legislation.
  2. We support Australia’s adoption of the International Auditing and Assurance Standards Board (IASB) Standard for Sustainability Assurance Engagements, ISSA 5000, subject to amendments and/or clarification where the draft standard potentially conflicts with Australian law, including audit requirements under the finalised climate reporting legislation.
  3. Local pronouncements and/or guidance which could assist lift the quality of, and confidence in, sustainability disclosures and assurance engagements include: quality and competency requirements; the extent of permitted reliance by the financial auditor on sustainability experts; Group 3 audit over a statement of no material climate-related risks or opportunities; materiality; preconditions of assurance; limited v. reasonable assurance; approaches to greenwashing; and communication between auditors and those responsible for governance.

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