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New CAQ Report reveals how auditors enhance the reliability of company-reported ESG information

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Jul 01, 2020

On July 1, 2020, the Cen­ter for Au­dit Qual­ity (CAQ) has released a new report “The Role of Auditors in Company-Prepared ESG Information: Present and Future” outlining how investors are using environmental, social, and governance (ESG) information and the evolving, more prominent role of auditors in advancing the reliability, comparability, and relevance of this reporting.

Like the audits of financial statements and internal control over financial reporting, third-party assurance from a public company audit firm enhances the reliability of ESG information presented by companies to investors and other stakeholders. COVID-19 has further accelerated the focus on ESG information. Investors are increasingly seeking information on public company ESG practices in response to COVID-19, especially employee health and work environments.

The CAQ report examines the type of information companies often capture, the myriad of reporting standards and frameworks for presenting ESG information, and highlights current examples of audit firms assuring company-prepared ESG information.

As market stakeholders consider the future of company-reported ESG information, the CAQ outlines key questions board members should consider when discussing ESG reporting with management and investors, including what the company has done to date and where it hopes to go. Similarly, the CAQ urges investors to consider how companies’ ESG information was developed, whether it is standardized, and whether it is reliable.

For further details, refer to the press release and the Report on the CAQ's web­site.

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