Instructive for both auditors and companies, the CAQ’s “Audited Financial Statements and Climate-Related Risk Considerations” provides an overview of how climate-related risks and initiatives (e.g., net zero commitments) should be considered in the context of the current accounting and auditing standards. The publication includes examples of varying financial statement impacts associated with net zero commitments tagged with different time frames and sample climate-related risk areas of inquiry and questions companies may anticipate from their auditors in conjunction with the auditor’s ordinary course risk assessment.
See these articles from Journal of Accountancy and Accounting Today: “CAQ reports on climate risks and audited financial statements” and “IFAC: Accountants should act now on climate reporting” and associated IFAC statement; our prior report: “Climate-Related Disclosure Guidance”; the SEC’s 2010 climate change guidance; and additional resources on our Climate Risk & Disclosure and Financial Reporting pages. This post first appeared in the weekly Society Alert!