In addition, many companies that lodge GHG Reports will also include details about their greenhouse gas emissions in an annual sustainability report. Assurance of sustainability reports is also not compulsory. However, there appears to be an increasing trend for these reports to be assured. In Australia, Woodside Petroleum Limited (Woodside) and AGL Energy Limited (AGL) are two companies that report to the NGER and issue audited Sustainability Reports.
In this case, we are going to give GHG emission disclosure of two companies which are Woodside Petroleum Limited and AGL Energy Limited.
Woodside Petroleum Limited- GHG reporting
Approach of Woodside- “To understand the environment in which we work, minimise our impacts upon them and transparently report them.”
In next section a brief of environmental performance is done, which goes like this-
• We introduced 1% reduction in fuel intensity (TJ per kt of hydrocarbon production) in 2016.
In a separate section under the main heading, it has mentioned scenario of GHG. It has claimed that since December 2016, it has minimised emission of heavy fuel (HFO) by maximising use of LNG as shipping fuel. It has also given a diagram showing flaring statistics over 4 years period.
Though the organization hasn’t mentioned any specific GHG reporting, but it has included the key figures under its “Environmental Performance Indicators”.
AGL Energy Limited- GHG Reporting
• It will continue to provide the market with safe, reliable, affordable and sustainable energy option.
• Improve the GHG efficiency of its operation and those over which it has influence.
The report has also mentioned “How measurement is done for GHG in AGL?” for ex- The operational greenhouse gas footprint is measured from the emissions from the activities and assets that AGL operates.
The organization provides emission figures in separate segment on sustainability reporting which is called as “Data Centres”.
B. NGER Audit Requirements
Audit may be required for-
• To support an application or a report
• In event of breach of legislation suspected
• As a part of broader compliance monitoring strategy
Examples- Emission reduction fund audit-regarding the assurance of calculation of carbon abatement reported by an organization is accurate.
Greenhouse and Energy Reporting Audit- To identify whether registered companies have followed NGER Act. 2007 or not.
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C. Assurance Opinion
Woodside Petroleum Limited
Subject matters are-
• Transparency, anti-bribery and corruption
• Regulatory compliance
• Climate change
• Major incident prevention
• Major incident response
• Health and safety performance.
Criteria applied- Global Reporting Initiatives G4 guidelines and Woodside’s own reporting pattern for non-financial performance.
Management responsibility- Collection, preparation and presentation of subject matter
Assurance practitioner’s responsibility- Australian Standard Assurance Engagement 3000 (revised)
Level of approach- Assessing and determining material aspects, interviewing selected corporate personnel and site personnel to understand process etc.
Limitations- The assurance report is limited to 2016 sustainability report only which doesn’t include financial data and forward looking statement of management. [Woodside Team . (2017)]
AGL Energy Limited
AA 1000 principles- It is the accountability principles standards for managing sustainability performance.
Strategic sustainability indicator- It talks about the sustainability performance and target.
Climate change, organizational safety and other performance data-
GRI standard- recording and presentation as per GRI guidelines
Rest report items are more or less similar as mentioned in Woodside Petroleum with few more items that are given here-
Use of report- The report is solely for directors of AGL. Deloitte disclaims any responsibility assumptions for any reliance on this report or subject matters it relates.
Independence- APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standard Board.
Electronic information- Limited assurance engagement included in web-based information available via web-link. [AGL team. (2017)]
D. Audit assertions
1. Establishing of the assessment boundary
2. Evaluation of data quality and client data resource
Assessment boundary is based on selection of GHG, project boundary and operational boundary. It is difficult for the audit to set the boundary as it largely depends on organizational policy. It varies with one to other. Auditor has to rely on organizational policy to form opinion. In second case also, data quality and client data resource forms the base for assurance and opinion. As in above case, the assurance statement issued as per previous year sustainability report so the authenticity and accuracy of GHG is dependent what it was reported earlier and it is carried forward in such manner.
A. Auditor sued for negligence
Where did the duty of care negligence take place?
• The auditor doesn’t take all stocks into consideration. Case- Lees estate Building and Investment Co. Ltd. vs. Shepherded.
• Auditor didn’t verify the valuation of stock and it is coming under breaching of his independent examination to financial statements.
• Auditor didn’t disclose the manipulation done in inventory (Company’s Bathurst facility). (case-Rex V Lord Kylsant and Another (1931)
• Presumption of auditor regarding current year statement accuracy on the basis of past 6 year’s performance. 9Application of AS-12- Identifying and assessing risk of material misstatement.) [Perry, P. (2016)]
The auditor will be sued on grounds of liability to third party as when the takeover took place, being an auditor it was his duty and responsibility to state real scenario but he didn’t perform under pressure of management.
B. Successful in legal action
Here the Auditor is also liable for third party as Warehousing Ltd. has gone with auditor’s decision. It is so because auditor has statement which was not accurate, over valuation caused financial loss to the organization and statement (Auditor’s statement) were made under pressure thus he is found guilty here. Thus, a legal proceeding will be done to him. [Canndler vs Crave Chrismas & Co. 1951 and De Srvary vs Holden Howwerd & Co. 1960]
C. Letter to Auditor
1. Warehousing Ltd. would come to know about the breach of independence of auditor and would have asked CFW to re-audit reports.
2. If the auditor had not given any such disclosure, then the company can sue against auditor against criminal liability under the condition that falsified accounts and statements were made and produced to company and legal proceeding would have taken place.
AGL Energy Team. (2017). Retrieved from http://agl2017.reportonline.com.au: http://agl2017.reportonline.com.au/sustainabilityreport/assurance-statement
AGL team. (2017). AGL sustainability report . AGL.
ICAI. (n.d.). Liabilities of Auditor. New Delhi: ICAI.
Perry, P. (2016, January 18). Retrieved from http://www.mondaq.com: http://www.mondaq.com/uk/x/458826/Accounting+Standards/Recent+Key+Cases+On+Accountants+Liabilities
Saab, K. (2011, November 01). Retrieved from studypoints.blogspot.in: https://studypoints.blogspot.in/2011/11/discuss-in-details-liabilities-of_2717.html
Woodside Team . (2017). SUSTAINABLE DEVELOPMENT REPORT 2016. Woodside.