Difference between financial audit and environmental audit
Assets
Asset impairment Enquire about any planned changes in capital assets, for example, in response to changes in environmental legislation or changes in business strategy and their impact on the valuation of those assets or the entity as a whole. For any asset impairments related to environmental matters that existed in previous periods, consider wheth.
Controls Over Social and Environmental Risks
Where environmental matters represent a significant risk, they may fall within the ambit of the internal control system. Management may achieve control over environmental matters in the following ways: entities with low exposure to environmental risk, or smaller entities, will probably monitor and control environmental matters as part of their norm.
Difficulties in Measuring Social and Environmental Performance
It is accepted that measuring social and environmental performance is difficult. The following types of measures may be used: Direct – for example the number of kilos of contaminant emitted. Relative – data compared to another parameter. For example, kilos of contaminant / kilo of product. Indexed – measured over a period of time. Aggregated – info.
Do financial statement auditors play a key role in environmental audits?
Environmental and financial audits have similar structures
In both systems, the evaluation of control systems is essential
This similarity supports the argument that traditionally trained financial statement auditors can play a key role in environmental audits
Introduction to Social and Environmental Audits
Environmental audit has been defined as ‘A management tool comprising a systematic, documented, periodic and objective evaluation of how well organisations, management and equipment are performing with the aim of contributing to safeguarding the environment by facilitating management control of environmental practices and assessing compliance with .
Should external accountants be involved in environmental auditing?
If external accountants are engaged in environmental auditing, they should be part of multidisciplinary teams that also include ,scientists and engineers to avoid a too strong focus on procedures
Rather than treating these audits as totally different, it is proposed that there be a move towards integrated, or even universal, audits
Substantive Procedures
Auditors may perform substantive testing to obtain evidence in relation to environmental matters. It is not intended that all of the procedures listed below will be appropriate in any particular case. In many cases, the auditor may judge it unnecessary to perform any of these procedures. General Documentary review Consider minutes from meetings of .
What are functional environmental audits?
Functional environmental audits - Specific audits which are focused on one environmental element or impact, such as :,water or electricty I will focus on the two main types (compliance and management audits) today as they are the audits which most organisations focus on and rely on
What is environmental auditing?
Environmental auditing has gradually become focused on the evaluation of systems
This has made the typical structure of an environmental audit similar to that of a financial statement audit, which makes the entrance of accounting professionals into this market easier
What is a financial audit?
The audit is defined as an unbiased and objective examination of the financial statements, records, physical inventory, operations, performances etc
,of an organization, irrespective of its size, nature and legal structure, with the aim of expressing the opinion on the financial statements through an audit report
What is environmental auditing?
Environmental auditing has gradually become focused on the evaluation of systems
This has made the typical structure of an environmental audit similar to that of a financial statement audit, which makes the entrance of accounting professionals into this market easier
What is the difference between audit and review?
The review is often contrasted with audit, but they are different in the sense that an audit is a thorough examination of the financial information of an organization, to give his/her opinion on the same
On the other hand, the review can be understood as the formal assessment of the financial statement, to introduce change, if any
Difference between financial audit and environmental audit
Any of various types of risk associated with financing
Financial risk is any of various types of risk associated with financing
Including :
Financial transactions that include
Company loans in risk of default.Often it is understood to include
Only downside risk
Meaning the potential for financial loss and uncertainty about its extent.
