Overview of Responses IAASB Consultation Paper “Assurance on a GHG Statement”

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

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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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.

11. Proposed Timetable

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