CLIMATE REPORTING BILL A SIGNIFICANT COST FOR GROUP 3 BUSINESSES
Almost 90 per cent of auditors who responded to a new survey from peak accounting body Chartered Accountants ANZ (CA ANZ) do not support the Government’s requirements to implement mandatory Climate Reporting and assurance on Group 3 Firms. Group 3 Firms include private companies, Not for Profits, or companies limited by guarantee.
The survey was conducted by CA ANZ between 12 and 17 April 2024. Members that were surveyed included those involved with reporting and auditing work, work with SMP or NFP organisations, or have a direct professional interest in Government regulation on financial or climate reporting and auditing.
“No one is denying the importance of material climate related disclosures, but it is a significant miscalculation for Group 3 entities to have to go to the significant expense, as well as the investment of time, to prove they have no material climate risk.
“What’s the point of subjecting Group 3 firms to such costs when the government has already indicated it expects that 95 per cent of them will have no material risks or opportunities?” said Amir Ghandar CA ANZ Reporting and Assurance Leader.
“Our members are experts in this field and deal with smaller businesses every day, and they say the Federal Government has got it wrong on this one and needs to amend the Bill,” Mr Ghandar said.
“70 per cent of those surveyed believed it to be very or somewhat irrelevant to prepare an audited climate statement or statement of climate risks/opportunities for Group 3 companies.
“And 84 per cent of those surveyed strongly disagreed or disagreed that those Group 3 companies will have the capacity to prepare an auditable climate statement or assessment of climate risks and opportunities within the coming three years.
“In our joint submission with CPA Australia to the Government, we wrote that we support Treasury’s efforts to establish legislation for a framework for climate related disclosures, but those in Group 3 don’t appear to have been appropriately considered or consulted in the design of the package.
“It’s anticipated that these audits would cost between $20,000 and $50,000 and impact between 7,000 and 8,000 businesses which is an enormous cost when these businesses should be concentrating on innovation, employing Australians, and carefully framed actions that will actually support a low carbon economy.
“It is also going to put enormous strain on the audit profession at a time when we know many are facing burn out and there is a huge shortfall in auditors to complete existing tasks and requirements.
“We will continue to advocate to government about the importance of ensuring its recently introduced Climate reporting Bill is fit purpose. I’m certain they don’t want to send smaller business into unnecessary financial hardship as a result of these planned new reporting requirements,” Mr Ghandar said.
ENDS
Media Contact
Gillian Bowen
M +61 (0)411 485 421 E: gillian.bowen@charteredaccountantsanz.com
About Chartered Accountants Australia and New Zealand
Chartered Accountants Australia and New Zealand represents more than 138,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.