Generally accepted auditing standards require auditors to identify and assess the risks of material misstatement in the financial statements of the companies they audit in accordance with the financial reporting framework and to design and perform audit procedures responsive to those risks including, when relevant, climate-related risks.
Specifically, within Deloitte’s Audit & Assurance (A&A) practice, Deloitte is committed to supporting net-zero ambitions by planning and performing financial statement audits with a focus on quality, integrity, and objectivity, and in accordance with the relevant laws, regulations, and professional standards. Further, as one of the leading A&A providers, Deloitte has developed best-in-class training and methodologies, which embed climate considerations and keep pace with the relevant accounting, auditing, and assurance professional standards.
To demonstrate Deloitte A&A’s commitment to net-zero ambitions, Deloitte A&A has been monitoring four quality metrics in the audits of select financial statements:
Each metric contributes to the overall picture of whether climate-related risks were appropriately considered and responded to during a financial statement audit. Deloitte monitored these metrics for December 2023 and March 2024 year-end audits of select companies determined by Deloitte as being among the most significant companies we audit in carbon-intensive industries (e.g., oil and gas, industrial products, and electrical utilities) (referred to as “in-scope engagements”). Consistent with last year, Deloitte achieved 100% for each of the four quality metrics (i.e., all in-scope engagements met the criteria measured in each metric). Deloitte will reassess the list of in-scope engagements periodically to reconsider our monitoring activities around considerations of climate-related risks on financial statement audits.
During FY2024, Deloitte continued to engage proactively with key stakeholders, including policymakers whose activities affect business and industry and who may be in positions to establish public policies that support a net-zero transition of economic sectors in line with science and with regard to social impacts. These engagements are described in the Environmental section of the Deloitte Global Impact Report along with Deloitte’s science-based emissions reduction targets.