In January this year, the Auditing and Assurance Standards Board (AUASB) released ASSA 5000 – the rulebook Australian assurers must follow when reviewing climate disclosures. For CFOs and sustainability teams, this is not light reading. But it is essential. Assurance will be the most significant cost increase from mandatory climate reporting, and the companies that understand what auditors are looking for will spend less time scrambling at reporting season.

The logic is straightforward. Integration of AASB S2 into the Corporations Act has moved climate reporting from reputational exercise to legal obligation. Every entity captured under the regime – regardless of which phase – will eventually require a reasonable assurance of its sustainability report. The requirement phases in gradually, but assurance is mandatory from day one.

The distinction matters.

Limited assurance is a negative test: assurers must report whether they found anything that caused them to believe the climate information is materially misstated.

Reasonable assurance is a positive test: assurers must gather enough evidence to express an opinion on whether the report complies with AASB S2. The evidentiary burden – and therefore the cost – rises considerably.

Contents

1. What are Assurers Looking for?
2. Accuracy and Valuation: Evidence Judgement
3. Completeness: A Test of Materiality
4. How to Prepare for Assurance

What are Assurers Looking for?

ASSA 5000 requires assurers to gather evidence against seven assertions. Understanding these now will shape how you document climate activities throughout the year.

1. Occurrence and existence: Did reported events happen as described?
2. Responsibility: Can you take credit for the information stated, or does it belong to someone else?
3. Accuracy and valuation: Is the reported information correct and supported by evidence? Note that a range that is broad but defensible is preferred over a single number that may be wrong.
4. Cutoff: Did what you reported occur or get decided within the reporting period?
5. Completeness: Does your report include all information that would influence a user’s climate-related decisions?
6. Presentation, classification, and understandability: Is information presented in accordance with AASB S2 and supporting frameworks, including the GHG Protocol and NGERS? This includes clarity on how you have applied those frameworks – boundary, scope, and emissions factors.
7. Consistency: Has information been assessed and prepared in the same way as previous reports? If not, are changes justified and disclosed? A history of consistent reporting reduces the evidentiary burden.

Organisations should consider these criteria when performing their climate activities to streamline documentation and ensure readiness for assurance. While all assertions must be assured, accuracy and completeness warrant closer attention as they consume the most time and assurance budget.

Accuracy and Valuation: Evidence Judgement

Accuracy provides report users with the comfort that what they read is true and reliable enough to inform decisions. To form this opinion, assurers require a sufficient quantity and quality of evidence against every claim.

Quality of evidence rests on three criteria.

1. The competence of sources. ASSA 5000 emphasises using criteria from authoritative sources – established sustainability frameworks and standards – to ensure reliability. Proprietary models require additional validation, which increases cost.
2. The basis of preparation. How did you approach climate activities and reporting? What inputs, assumptions, and methods did you apply? Climate remains an emerging discipline with few settled norms. Document your approach as you work, not retrospectively. Trying to reconstruct methodology at the reporting season is expensive and error-prone.
3. The existence of contrary information. If your assessment differs from other credible sources, you need to understand why – and be able to explain why your information is correct. Auditors will ask.

A final note on accuracy: estimates and forward-looking information are treated differently. Estimates – such as emissions forecasts based on historical data – require less judgement but more documentary evidence. Forward-looking information – targets, scenario analysis outcomes – requires sound assumptions rather than proof. Directors may take some comfort that ASIC’s limited liability provisions apply to both.

Completeness: A Test of Materiality

Completeness is ultimately a test of your materiality assessment. Assurers will form their own judgement on whether you have included all material information on all relevant climate topics.

Organisations should ensure they have a robust process for identifying relevant climate topics. This can be done internally or via specialists in scenario analysis and materiality assessment. A double materiality approach – assessing both financial impact and broader stakeholder effects – offers additional strategic insight, even where not required under IFRS-aligned legislation.

Whichever approach you take, document the inputs, assumptions, and methodology. If you cannot explain how you determined what matters, the assurer will do it for you – at your expense.

How to Prepare for Assurance

Start early and build rigour into the process, not as a last-minute addition. The biggest challenge for organisations under AASB groups 2 and 3 is the newness and complexity of sustainability reporting. These organisations should build time to make mistakes, locate the right data, and establish governance.

Four practical steps:

1. Document as you go. Every climate activity – scenario analysis, emissions calculation, risk assessment – should produce a methodology note explaining inputs, assumptions, and decisions.
2. Centralise your evidence. Create a single repository for supporting documentation. Auditors will want to see primary sources, not summaries.
3. Test your materiality process. If you cannot explain why certain topics were included or excluded, revisit your approach before the auditor does.
4. Engage your assurer early. Understanding their expectations before you finalise your report is cheaper than discovering gaps afterward.

Assurance is not a compliance burden to be minimised. Done well, it forces the kind of rigour that improves strategy, risk management, and stakeholder trust. The companies that treat it as a discipline rather than overhead will find reporting season considerably less painful.

About the Author

Liam Jouannon is a Strategy Manager at sustainability strategy consultancy BWD Strategic.