‘ESG is an area of opportunity for CPAs to meet the public interest and provide value. Although reporting of and assurance on ESG information in the United States is on the rise, this is an evolving area in the United States. In Europe and other parts of the world, many organizations are required to report on ESG information, and a significant portion of ESG assurance is being performed by an audit firm or an affiliated provider, according to The State of Play in Sustainability Assurance: Benchmarking Global Practice, a new report from AICPA & CIMA and the International Federation of Accountant (IFAC)’

So where are most companies in the USA seeking these assurances from at the present?

According to the report the overwhelming majority of them have their ESG disclosures assured by non-CPAs (as much as 90%). These other service providers are not always governed by the strict ethics and quality measures that are provides by finance professionals and thus leaving them plenty of opportunities to educate their clients on ESG including the consideration of risks related to climate that can be material to the financial statements – this was highlighted by Jennifer Burns, CPA, the AICPA’s chief auditor.

“CPAs are uniquely qualified, based on their understanding of their clients, to enhance the reliability of ESG-related disclosures. The auditor’s knowledge should be leveraged to deliver assurance over ESG,” she said.

The report mentions that CPA the AICPA & CIMA and IFAC strongly support global standards for sustainability-related information because they would provide consistent metrics across the globe. The IFRS Foundation may take a step in that direction in the fall, when it is expected to announce a decision on whether to create an international sustainability reporting standards board.

If this board comes to fruition, a one standard policy in place will certainly help the independent CPAs increase the reliability of ESG reporting, and CPAs will have an opportunity to play a critical role in this process.

Burns goes on to say “As companies develop their reporting and assurance approach, CPAs have the standards and expertise to help them. CPAs are independent, follow a consistent set of assurance standards, and are subject to quality control rules and monitoring due to their professional requirements. We’re experts on what to disclose and how to provide assurance. The profession is ready”

At Ultimate Access our CIMA and CPA students are taught the latest in ESG standards as part of their professional qualification and are given all the relevant support to implement it in their future positions. This is very important as new standards are being set all the time according to global trends. This is where current teaching content is so important to remain relevant in the market place.

References and further reading

Journal of Accountancy CPA Australia AICPA CIMA