Assurance of Greenhouse Gas Statement

Questions: The senior audit partner at Milimani Chartered Accountants, Stephanie Snook, is worried. As there was an agreement at the Climate Change Conference in Paris last year, if we dont start offering services that can provide assurance on greenhouse gas statements soon, well lose clients. She has asked you to investigate what may be involved in providing assurance services on greenhouse (GHG) statements. Required Conduct an internet search for one (1) Australian company whose website includes a GHG emissions disclosure and provide a brief report for Sarah Snook that: (a) identifies the voluntary and regulatory components of the companys disclosure. (b) summarises the structure and contents of the companys disclosure (including the categories of disclosure). (c) indicates which two (2) audit assertions would be of greatest concern to Milimani and explains why. (d) suggests audit procedures to collect sufficient and appropriate audit evidence relating to those two audit assertions. Answers: In this given problem Stephanie Snook, Senior Audit partner of Milimani Chartered Accountants, is worried about the assurance service to be provided on green house gas (GHG) emission to Australian companies as per the agreement at conference on climate change held in Paris last year otherwise they will have to lose clients (Peters Romi, 2014). Albright Wilson ltd is an Australian company, which provides disclosure on GHG emission. By analyzing the disclosure given by the company on GHG emission a report is being provided to Stephanie Snook. Part (a) Voluntary disclosure is one of the most important aspects an Australia company must follow while corporate reporting. It is the duty of the company to disclose all the environmental, social and economic impact due to various operations of the company. Reporting should not contain only information for the benefits of the stakeholders, it must also report on the various environmental aspects (Benà ¢Ã¢â€š ¬Ã‚ Amar McIlkenny, 2015). There are many voluntary and regulatory components that a company is required to disclose relating to GHG emission. Voluntary disclosure identifies various factors in relation to GHG release and various institutional governing bodies analyze these. The aim of these disclosures is to make constructive changes and develop the information provided to investors in respect to corporate carbon emission reporting. Several incentives has been taken to measure organizational activities on climate changes (Liesen et. al., 2015). Part (b) Albright Wilson ltd is a company, which falls under the category of Palm oil processor and Traders. The structure and content of Albright Wilson ltd in relation of GHG emission includes the following: Operational profile includes main activities relating to supply chain management such as refining of CPO. Production of bio-fuel and dealer, progress in documentation and operation, System for computing the usage and volume of palm oil related products handled during the year, fractions and derivatives relating to palm oil, quantity of palm oil products handled during the year, certified tonnage during the year are also the main activities under this profile. Time bound plan, which includes certification of supply chain that was planned and achieved. Expected commitment towards certification of RSPO and achievement of milestone and targets set, legal requirement and corrective actions taken, sources of supplies are also the within the requirement of time bound plan (Borghei et. al., 2016). Emission of GHG, which includes reporting of GHG emission from daily operation of the company, which is not done by the company yet. Company offers explanation that their suppliers are very limited and they need some time to educate them on the negative effects of GHG emission. Because of that reason, the company will report on this matter from the next year by making a plan with the suppliers. Part (c) Two audit assertions which are going to be the greatest concern of Milimani prescribed by ISO 14064, international standard for CHG Emission are as follows: Inventories Part 1 of ISO 14064 contains eight sections discussing issues relating to inventory within the organizations. There are many subsections under this sections which contains general principals relating to consistency, relevance, accuracy, completeness and transparency. These guidelines assist in interpreting those standards and serves as a guidance for issues that is not within the boundary set by those standards. Specifically it covers three aspects for developing a GHG inventory within the organization (Eleftheriadis Anagnostopoulou, 2015). It includes setting boundaries for inventory, quantifying and reporting of GHG. Verification - Part 3 of ISO 14064 has developed a process for GHG verification such as organizational inventory report of GHG. It was developed with the help of best practices obtained from various techniques relating to financial accounting and also environmental auditing. It contains guidelines for conducting verification of GHG which included ethical conduct, due diligence, professional care, independence and true and fair representation. It also includes fundamentals for verification which are objectives, scope, level of assurance and criteria. Part (d) Audit procedures to collect appropriate and sufficient audit evidence relating to: Inventory The auditors have to collect proper evidence to make sure whether both the boundaries, operational and organizational are included in the GHG inventory. Organizational boundary refers to the facilities which are documented for conducting inventory and must be included in the inventory. 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