Guidance paper on the emissions assistance program

The Institute of Chartered Accountants in Australia (the Institute) has welcomed the release of a guidance paper issued by the Department of Climate Change (DCC) on the assessment and audit process for activities which may be eligible for assistance as emissions-intensive trade-exposed (EITE) activities under the Carbon Pollution Reduction Scheme (CPRS).

The guidance highlights the assessment process which is designed to inform the government’s decision on activities in the economy and whether they are eligible to receive EITE assistance, the rates of assistance and the basis for allocations to various activities. The final decisions are to be reflected in CPRS regulations.

The paper outlines the audit and assurance requirements for the data, which is to be audited to the same level as financial statements. The guidance requires the Lead Auditor to be a Registered Company Auditor, but notes that the audit team should also have a suitable mix of other skills and experience including technical and greenhouse gas emission skills. Further, the assurance engagement is to be conducted in accordance with standards issued by the Auditing and Assurance Standards Board (AUASB) and the Accounting Professional and Ethical Standards Board (APESB).

“The institute is pleased with the government’s decision to require the audit team to have a broad mix of skills to conduct these engagements, and for the lead auditor to be accredited as an RCA,” said Andrew Stringer, Head of Audit at the Institute of Chartered Accountants in Australia.

“It is also pleasing that the assurance and auditing engagement must be conducted in accordance with ASAE 3000 Assurance Engagements Other than Audits or Review of Historical Financial Information, issued by the AUASB. The necessity to comply with the independence requirement of the APESB’s Code of Ethics is also very important.”

Preparers and assurers of this data should note that the reporting timelines set out in the papers are very tight, as entities are required to have all data prepared and audited, and submitted to the DCC by Friday 1 May 2009. The paper mentions that the government may accept a lower level of assurance, where this is necessary to meet the deadlines for submission, or where there are issues associated with data availability or completeness, provided this is disclosed in the assurance report.

Data to be submitted regarding specified activities will be primarily historical data from the 2006–07 and 2007–08 financial years.

The institute is currently informing members of the deadlines regarding reporting and assuring the data of entities which will apply for preliminary assessment.

“The institute will continue working with government and industry in connection with emissions reporting and assurance,” added Stringer.