The ability of Certified Public Accountants (CPAs) to conduct Environmental, Social, and Governance (ESG) report audits and provide assurance levels beyond limited assurance is contingent on several factors, including the CPA’s professional qualifications, experience, and the regulatory environment in which they operate.
CPAs are well-positioned to perform ESG audits due to their expertise in financial auditing and assurance services. ESG reporting requires a thorough understanding of data collection, analysis, and reporting—areas in which CPAs are typically trained. However, ESG criteria often extend beyond traditional financial metrics, encompassing broader and more varied types of data. Thus, CPAs engaging in ESG audits must also have or develop expertise in sustainability and non-financial reporting.
When issuing an assurance beyond limited assurance, which is akin to a reasonable or high level of assurance, CPAs must adhere to established auditing standards and guidelines. This might involve the use of internationally recognized frameworks and standards such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), or the Task Force on Climate-Related Financial Disclosures (TCFD).
Furthermore, the authorization for CPAs to provide higher levels of assurance on ESG reports is often subject to national and jurisdictional regulations. These regulations determine who can offer such services and under what conditions. In many regions, CPAs can provide this higher level of assurance if they have proper accreditation and if the applicable auditing standards and ethical requirements are met.
It’s also worth noting that as ESG reporting continues to evolve, there may be an increasing expectation for CPAs to collaborate with professionals from other fields such as environmental science to ensure comprehensive and credible audits that meet stakeholder demands.
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