Auditing Standards and Regulation are Rapidly Changing

Auditing
Hayes, Dassen,Standards and
Schilder, Wallage: Regulation
Principle of auditing are Rapidly Changing
Hayes, Dassen, Schilder, Wallage: Principle of auditing
 The role of assurance engagement

Financial Information
Historical
Non Historical

Non Financial
Information

Use with The Audit Process: Principles, Practice and Cases

Third Edition by Iain Gray & Stuart Manson ISBN 1-86152-
946-5
2005 Thomson Learning
3/9/17 Agung Nugroho Soedibyo 3
Assurance
Assurance Engagements
Engagements on
on
Greenhouse
Greenhouse Gas
Gas Statements
Statements
ISAE 3410
Struktur
Struktur International
International Standard
Standard
IAASB
IAASB

assurance
Non
assurance

3/9/17 Agung Nugroho Soedibyo 5

 ISAE
ISAE
ISAE 3000
ASSURANCE ENGAGEMENTS OTHER THAN AUDITS OR REVIEWS OF
HISTORICAL FINANCIAL INFORMATION

3400 The Examination of Prospective Financial Information

3402 Assurance Reports on Controls at a Service Organization
3410 Assurance Engagements on Greenhouse Gas Statements
3420 Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus
ISAE
ISAE 3000
3000
ASSURANCE
ASSURANCE ENGAGEMENTS
ENGAGEMENTS OTHER
OTHER THAN
THAN AUDITS
AUDITS OR
OR
REVIEWS
REVIEWS OFOF HISTORICAL
HISTORICALFINANCIAL
FINANCIALINFORMATION
INFORMATION

include both attestation engagements, in which

1. A party other than the practitioner measures or evaluates the
underlying subject matter against the criteria,
2. and direct engagements, in which the practitioner measures or
evaluates the underlying subject matter against the criteria.
Assurance
Assurance Engagement
Engagement

An engagement in which
a practitioner aims to obtain sufficient appropriate
evidence in order to express a conclusion designed to
enhance the degree of confidence of the intended users
other than the responsible party about the subject matter
information
ISAE
ISAE3000
3000--Objectives
Objectives
1. Reasonable Assurance or Limited assurance
2. To express a conclusion
a. regarding the outcome of the measurement or evaluation of
the underlying subject matter
b. through a written report that conveys either
a reasonable assurance or
a limited assurance conclusion and describes the basis for the
conclusion
 Reasonable
Reasonable Assurance
Assurance

An assurance engagement in which

1. The practitioner reduces engagement risk to an acceptably low level in
the circumstances of the engagement as the basis for the practitioners
conclusion.
2. The practitioners conclusion is expressed in a form that conveys the
practitioners opinion on the outcome of the measurement or evaluation
of the underlying subject matter against criteria
Limited
Limited Assurance
Assurance

An assurance engagement in which

1. The practitioner reduces engagement risk to a level that is
acceptable in the circumstances of the engagement but where that
risk is greater than for a reasonable assurance engagement as
2. The basis for expressing a conclusion in a form that conveys whether,
based on the procedures performed and evidence obtained, a matter(s)
has come to the practitioners attention to cause the practitioner to
believe the subject matter information is materially misstated.
 Suitability
Suitability of
of the
the criteria
criteria
a. Relevance:
Relevant criteria result in subject matter information that assists decision-making by the
intended users.
b. Completeness:
Criteria are complete when subject matter information prepared in accordance with them
does not omit relevant factors that could reasonably be expected to affect decisions of the
intended users made on the basis of that subject matter information. Complete criteria
include, where relevant, benchmarks for presentation and disclosure .
c. Reliability:
Reliable criteria allow reasonably consistent measurement or evaluation of the underlying
subject matter including, where relevant, presentation and disclosure, when used in
similar circumstances by different practitioners.
d. Neutrality:
Neutral criteria result in subject matter information that is free from bias as appropriate in
the engagement circumstances.
e. Understandability:
Understandable criteria result in subject matter information that can be understood by the
intended users.
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Type
Type of
of assurance
assurance
Reasonable Positive Assurance Direct
Direct Opinion
Opinion
Assurance
the financial statements
a reduction in have been prepared in
assurance accordance with xxx
engagement risk to standards
an acceptably low
level
Limited Negative Assurance Indirect Opinion
Assurance
'nothing has come to our attention
that causes us to believe that the
a reduction in
financial statements are not
assurance
prepared in accordance with
engagement risk to a
applicable legislation and
level that is
accounting standards'
acceptable in the
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Agung Nugroho Soedibyo 14
ISAE
ISAE 3410
3410

INTERNATIONAL
STANDARD ON
ASSURANCE
ENGAGEMENTS 3410
ASSURANCE
ENGAGEMENTS ON
GREENHOUSE GAS
STATEMENTS

3/9/17 Agung Nugroho Soedibyo 15

Emisi
Emisidan
danefek
efekrumah
rumahkaca
kaca(green-house)
(green-house)
Emisi gas buang adalah sisa hasil pembakaran bahan bakar di dalam mesin pembakaran dalam,
mesin pembakaran luar, mesin jet yang dikeluarkan melalui sistem pembuangan mesin
Sisa hasil pembakaran berupa:
H2O : air
CO: gas karbon monooksida yang beracun,
CO2 : gas karbon dioksida yang merupakan gas rumah kaca,
NOx senyawa nitrogen oksida,
HC berupa senyawa Hidrat arang sebagai akibat ketidak sempurnaan proses pembakaran serta partikel lepas

Gas rumah kaca (Green House Gas/GHG)

adalah gas-gas yang ada di atmosfer yang menyebabkan efek rumah kaca. Gas-
gas tersebut sebenarnya muncul secara alami di lingkungan, tetapi dapat juga
timbul akibat aktivitas manusia.
Efek rumah kaca (pertama kali diusulkan oleh Joseph Fourier pada 1824),
merupakan proses pemanasan permukaan suatu benda langit (terutama planet
atau satelit) yang disebabkan oleh komposisi dan keadaan atmosfernya.

3/9/17 Agung Nugroho Soedibyo 20

Green
Green House
House Effect
Effect Efek
Efek Rumah
Rumah Kaca
Kaca

3/9/17 Agung Nugroho Soedibyo 22

Every business has processes, products or services that emit
greenhouse gases (GHG) either directly or indirectly.
GHGs include
carbon dioxide (CO2),
methane (CH 4),
nitrous oxide (N2O) and
fluorinated gases
Emissions
EmissionsFactor
Factor
A mathematical factor or ratio for converting the
measure of an activity (for example, liters of fuel
consumed, kilometers travelled, the number of animals in
husbandry, or tonnes of product produced) into an
estimate of the quantity of GHGs associated with that
activity.
A GHG Statement is a quantified statement of an entitys GHG
emissions over a particular period.
GHG Statements have a variety of uses, including
being used as part of Emissions Trading Schemes (ETS), with the
main schemes currently having a worldwide value of more than
USD 140 billion

The GHG statement will ordinarily include direct emissions, and

may include indirect emissions the reason for preparation will
influence what is include
Reasons for preparing a GHG Statement
Reasons for preparing a GHG Statement

It may be required under a regulatory disclosure regime, such as the

National Greenhouse and Energy Reporting System in Australia.

It may be required as part of an emissions trading scheme, such as the

European Union Greenhouse Gas Trading Scheme.

The entity may make voluntary emissions disclosures.

These may be included
as part of a broader sustainability report;
they may be published as a stand-alone document; they may be in
the form of a response to a questionnaire; or
they may be prepared to include in a carbon register (e.g., the
California Climate Action Registry).
 Meaning
Meaning of
of aa GHG
GHG Statement
Statement
SAE 3410 defines a GHG Statement (sometimes known as an
Emissions Inventory)
a. as a statement that sets out the constituent elements and
quantification of an entitys GHG emissions for a period.
b. It also includes, where applicable, comparative information and
explanatory notes, including a summary of significant
quantification and reporting policies.
c. An entitys GHG Statement may also include a categorized
listing of removals or emissions deductions.
d. Emissions reported on include:
i. Direct emissions
ii. Indirect emissions
 Direct
Direct and
and Indirect
Indirect Emission
Emission

Direct emissions (Scope 1 emissions)

emissions from sources that are owned or controlled by the entity.

Indirect emissions (Scope 2 and 3 emission

these arise as a consequence of the activities of the entity, but occur at
sources that are owned or controlled by another entity. Indirect emissions
include:
Scope 2 emissions
emissions associated with energy that is transferred to and consumed by
the entity.
Scope 3 emissions
all other indirect emission
Emissions
EmissionsTrading
TradingScheme
Scheme

A market-based approach used to control greenhouse gases by providing

economic incentives for achieving reductions in the emissions of such gases

Parties with commitments under the Kyoto Protocol (Annex B Parties) have accepted
targets for limiting or reducing emissions. These targets are expressed as levels of
allowed emissions, or assigned amounts, over the 2008-2012 commitment period.
The allowed emissions are divided into assigned amount units (AAUs).

Emissions trading, as set out in Article 17 of the Kyoto Protocol, allows countries that
have emission units to spare - emissions permitted them but not "used" - to sell this
excess capacity to countries that are over their targets.
Thus, a new commodity was created in the form of emission reductions or removals.
Since carbon dioxide is the principal greenhouse gas, people speak simply of trading in
carbon. Carbon is now tracked and traded like any other commodity. This is known as
the "carbon market."
Removal
Removal
Removal may be achieved by storing GHGs in geological
sinks (for example, underground) or biological sinks (for
example, trees).
Where the GHG statement includes the removal of
GHGs that the entity would have otherwise emitted to
the atmosphere, they are commonly reported in the
GHG statement on a gross basis, that is, both the source
and the sink are quantified in the GHG statement.
Where removals are covered by the practitioners
conclusion, the requirements of this ISAE apply in
relation to those removals as appropriate.
 Inventory
Inventory uncertainty
uncertainty
GHGs (or emissions inventories) are, by nature, subject to uncertainty, including:

1. Scientific uncertaintythis arises because of incomplete scientific knowledge about the

measurement of GHGs; and
2. Estimation or measurement uncertaintythis results from the measurement and
calculation processes used to quantify emissions within the bounds of existing scientific
knowledge.

The fact that the entitys emissions are subject to uncertainty

does not mean that the emissions are not an appropriate subject
matter, unless the impact of uncertainty on the GHG Statement
is very high. Disclosure of the inherent uncertainty is required in
the practitioners report
Relationship
Relationship with
with ISAE
ISAE 3000
3000

ISAE 3000,
Assurance Engagements Other than Audits or Reviews of Historical Financial Information,

umbrella standard under which certain subject-matter specific

assurance standards, including ISAE 3410, operate. An engagement
in accordance with ISAE 3410 must also comply with the
requirements of ISAE 3000
Risk-based
Risk-basedapproach
approach
a risk-based approach, regardless of whether it is a
reasonable or limited assurance engagement.
1. Obtains an understanding of the entity and its
environment, including the entitys internal control;
2. Identifies and assesses the risk of material
misstatement in the GHG Statement;
3. Performs procedures to address the identified risks;
and
4. Reports in accordance with the practitioners findings
Multidisciplinary
MultidisciplinaryTeams
Teams
Engagements under ISAE 3410 are ordinarily expected to
be undertaken by a multidisciplinary team that may
include one or more experts :
1. Assurance skills; and
2. GHG competencies (e.g., understanding laws and
regulations related to emissions reporting, GHG
quantification and measurement methodologies, etc.)
3. Specialist ( as need it) :
Information systems expertise; and
Scientific and engineering expertise
http://www.ree.es/sites/default/files/
04_SOSTENIBILIDAD/Documentos/in
ventory_of_CO2_emissions_REE_sco
pe_and_methodology_v2.pdf

3/9/17 Agung Nugroho Soedibyo 35

3/9/17 Agung Nugroho Soedibyo 36
3/9/17 Agung Nugroho Soedibyo 37
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Limited
Limited Review
Review

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Responsibilities
Responsibilities

3/9/17 Agung Nugroho Soedibyo 40

References:
References:

1. IAASB : International Framework for Assurance

Engagement
2. IAASB : ISAE 3000 - ISAE 3000 (Revised), Assurance
Engagements Other than Audits or Reviews of
Historical Financial Information
3. ICEAW : Assurance Source Book Guide to assurance
services, ICEAW 2012

3/9/17 Agung Nugroho Soedibyo 41

Terima
Terima kasih
kasih

3/9/17 Agung Nugroho Soedibyo 42