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SOP 13-1 Attest Engagements on Greenhouse Gas Emissions Information

SOP 13-1 Attest Engagements on Greenhouse Gas Emissions Information

Author: AICPA
Publisher: John Wiley & Sons
ISBN: 9781937352141
Published In: May 2017
Format: Paperback , 80 pages
Jurisdiction: U.S. ? Disclaimer:
Countri(es) stated herein are used as reference only

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Mounting concern over climate change around the world has resulted in a wide array of legislative, regulatory and voluntary responses for reporting and reduction of greenhouse gas emissions (GHG). Corporate and public interest in sustainability and climate change issues, and voluntary reporting of greenhouse gas (GHG) emissions information, has grown significantly in the United States during the last decade. The number of U.S.-based companies seeking external assurance on their sustainability reports continues to grow. The majority of these companies are seeking a moderate level of assurance, or a review. While the existing attestation standards provide a framework for performing such services, the specific application guidance in this area needs to be developed.

The AICPA previously issued Statement of Position (SOP) 03-2, Attest Engagements on Greenhouse Gas Emissions Information, to provide guidance to CPAs on how to apply the attestation standards to GHG emissions reporting for an examination level of service with the expectation that it would be used to satisfy requirements for assurance in connection with GHG trading schemes or regulatory submissions.

However, the first requests coming through for assurance in the United States are not to satisfy regulatory requirements but, rather, appear to be from companies that are voluntarily looking to add more credibility to information that they are publicly reporting. As a result, they are seeking assurance for this purpose at a more cost-effective level than an examination.

To respond to this need, SOP 13-1 updates SOP 03-2 by including guidance on how to apply the attestation standards for a review engagement to the specific subject matter of GHG emissions information.

This SOP is an essential resource for practitioners performing GHG engagements, whether examinations or reviews, and provides guidance on performing and reporting:

Examination or review on a schedule or an assertion relating to information about a GHG emissions inventory or a baseline GHG inventory
Examination or review on a schedule or an assertion relating to information about a GHG emission reduction in connection with the recording of the reduction with a registry or a trade of that reduction or credit

Introduction 1

GHG Reporting in the United States 2

Terms and Definitions Used by Registries and Regulatory Frameworks 3

Scope of This SOP 4

Engagement Acceptance Considerations 5

Independence 7

Adequate Knowledge of Subject Matter and Use of a Specialist 7

Considerations When Selecting and Using the Work of a Specialist 11

Criteria 12

Attributes to Be Met by GHG Emission Reductions 13

Materiality 15

Uncertainty in the Measurement of GHG Emissions 15

Consistency 16

Boundaries 16

Scopes for Reporting GHG Emissions: Direct and Indirect Emissions 17

Baselines 19

Objective of the Engagement 19

GHG Inventory 19

GHG Emission Reduction Information 20

Written Assertion by the Responsible Party 23

Engagement Performance 23

Agreement on Engagement Terms 23

Planning the Engagement 24

Part of Attest Engagement Performed by Other Practitioners 27

Attestation Risk 27

Obtaining Sufficient Evidence 28

Consideration of Subsequent Events 34

Adequacy of Disclosure 35

Representation Letter 36

Reporting 38

Attest Documentation 41

Effective Date 41

Appendix A—Glossary 42

Appendix B—Sources for GHG Emission Protocols and Calculation Tools 48

Appendix C—Illustrative Management Representation Letter 50

Appendix D—Illustrative Examination Reports on GHG Emissions Information 53

Appendix E—Illustrative Examination Reports on GHG Emission Reduction Information 56

Appendix F—Illustrative Review Reports on GHG Emissions Information 59

Appendix G—Illustrative Review Reports on GHG Emission Reduction Information 62

Founded in 1887, the American Institute of Certified Public Accountants (AICPA) represents the CPA and accounting profession nationally and globally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA develops standards for audits of private companies and other services by CPAs; provides educational guidance materials to its members; develops and grades the Uniform CPA Examination; and monitors and enforces compliance with the accounting profession’s technical and ethical standards.

The AICPA’s founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, a licensing status and a commitment to serving the public interest.