International Auditing and Assurance Standards Board Overview of

International Auditing and Assurance Standards Board Overview of Responses IAASB Consultation Paper “Assurance on a GHG Statement” Caithlin Mc. Cabe and Roger Simnett, Co-chairs – Emissions Task Force IAASB New York 16 March 2010 1

Outline • Background • Who responded • What they said • Our tentative conclusions • Proposed timetable

Background • Dec 07 – Project proposal approved • May-Dec 08 – Four roundtables • Dec 08 – Board issues paper • June 09 – First read of ED • Sept 09 – Consultation Paper (120 days) • Dec 09 – COP 15 Copenhagen

Who Responded? • 19 Accounting bodies (17 submissions) • 6 Firms • 5 Standards-setters • 2 Supreme Audit Institutions • 2 Institutional investors • 3 Others: Canadian Stds Assoc, UNSW, Maresca • ACCA video conference chaired by Jon Grant

What did they say? • 212 page collation • Preliminary analysis only – Presentation based on first read – TF this weekend • Many detailed suggestions to consider • Generally happy with most aspects of WD

• Experts/multidisciplinary teams – Objectivity, not independence, of external experts – Approach, consistent with ISA 620, is correct • Relationship with regulatory requirements – Few, if any, requirements apply only to voluntary reporting • Analytical procedures – Often important; appropriately treated in WD • Internal control – Not always necessary to look at IC, but increasingly important – Appropriately treated in WD

• Assertions – Risk assessment at assertion level is correct – Clarity needed re “consistency and comparability” • Materiality, estimates and uncertainty – 16 of the respondents – broader than economic decisions – Estimates appropriately treated in WD – Additional detail on disclosure of uncertainty • Fraud – Treatment is appropriate in WD • Reporting – Mixed views re disclosure of multidisciplinary team and QC – Positioning of disclosure on uncertainty

• Fair presentation – Ordinarily compliance criteria – Allow “fair presentation” wording if required by regulation • Suitable criteria – Suitability of regulatory criteria? • Emissions deductions – Most respondents consider treatment to be appropriate – Some queries re “audited” offsets • Scope 3 – Cautionary language is appropriate – Clarify treatment if clearly material Scope 3 emissions are excluded • Direct reporting – No engagements identified

Links to ISAE 3000 & 2400 • Professional accountant – Use input for ISAE 3000 deliberation – Requirement to comply with ISQC 1 and Code • Number & nature of requirements – Extensive but not clear what to delete – Move engagement management to 3000 when issued • Limited assurance – Significant demand, both regulatory and voluntary – Helpful suggestions for taking issue forward

Key Conclusions • Standard still urgently needed. . . • . . for both reasonable and limited assurance. • Consultation has delayed the process, but. . . • . . . responses indicate confidence in WD, so. . . • . . . rapid progress can now be made.

Proposed Timetable Reasonable assurance March/April ‘ 10 Out-of session draft June ‘ 10 Exposure draft September ‘ 10 Limited assurance Out-of session draft? Issues paper and 1 st draft Exposure draft December ‘ 10 Collation and 1 st read March ‘ 11 Final ISAE June ‘ 11 Collation and 1 st read Final ISAE

International Auditing and Assurance Standards Board Overview of Responses IAASB Consultation Paper “Assurance on a GHG Statement” Caithlin Mc. Cabe and Roger Simnett, Co-chairs – Emissions Task Force IAASB New York 16 March 2010 12