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How climate-related risk considerations intersect with the audited financial statements

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Sep 24, 2021

In September 2021, the Center for Audit Quality (CAQ) released a new resource, "Audited Financial Statements and Climate-Related Risk Considerations", that provides investors and other stakeholders with a foundational understanding of current climate-related reporting and auditing requirements in the U.S. and how they are applied.

The CAQ is releasing this report at a pivotal moment for climate-related and other environmental, social and governance (ESG) reporting, as investor and other stakeholder demand for this information continues to increase.

Currently, climate-related risks are considered and assessed by management and auditors during the preparation and auditing of financial statements. Under current US accounting rules, climate-related risks may have a direct impact on the financial statements, an indirect impact, or in some cases no impact at all. Understanding current financial statement requirements can be a useful starting point for investors and others as they consider how and where to obtain their desired climate-related information to make capital allocation decisions and bridge any information gap that may exist today ahead of future rulemaking by the SEC or others.

Review the press release and publication on the CAQ's website.

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