ESG Reporting and Attestation: A Roadmap for Audit Practitioners
Wednesday, February 17, 2021
The building blocks of reliable, comparable and relevant environmental, social, and governance (ESG) information begin with a foundation of quality reporting by company management.
The American Institute of CPAs (AICPA) and Center for Audit Quality (CAQ) have teamed up to provide audit practitioners with an overview of ESG reporting and the related risk and legal considerations associated with a company’s decision to report ESG information in SEC submissions and engage an independent accounting firm to perform an attestation engagement related to such information.
In this relatively new landscape of ESG reporting, companies are wrestling with what ESG information to report and where and how to communicate it to stakeholders. Company reporting must be of high quality for investors and other stakeholders, who rely upon such data for their decisions. Independent auditors, in their public interest role, play a part in the flow of reliable information for decision making. Third-party assurance from an independent accounting firm can enhance the reliability of ESG information reported by companies, in a manner similar to the process that occurs with audits of financial statements and internal control over financial reporting.
The purpose of this roadmap is to assist practitioners in supporting companies with their ESG reporting goals. This roadmap can aid practitioners when they discuss with companies questions surrounding:
- where and how to report ESG information (e.g., in an SEC submission),
- whether to engage an independent accounting firm to perform an attestation engagement on the ESG information, and
- where to include the attestation report or reference such report.
Be sure to also read a follow up to this resource, Key Actions for Establishing Effective Governance Over ESG Reporting, where the AICPA and CAQ provide further insights into how companies can establish effective governance over ESG reporting.
This resource is general in nature. It is not intended to be a definitive or all-inclusive list of risk, accounting, and legal considerations; it is not intended to serve as legal advice. It should be read in conjunction with other applicable rules, laws, and regulations; practitioners should seek legal counsel to advise as appropriate.
