A Brief Exposition into Climate Change: How Accounting and Auditing Play A Role
A Brief Exposition into Climate Change: How Accounting and Auditing Play A Role

A Brief Exposition into Climate Change: How Accounting and Auditing Play A Role

August 2021

The average global temperature on earth has increased by a little more than 1 degree Celsius each year. Currently, in July 2021 the world has to face another malign news in the middle of a pandemic. This summer, in Western Canada and the US, forest fires have followed protracted and intense heatwaves. Following the IPCC report on 2021, it stated how climate change could threaten the environment and business. Certainly, it is an inevitable catastrophe and people should start doing something to help decrease the impact of climate change.

According to Morgan Stanley, climate-related disasters have cost North America $415 billion in the last three years. Moreover, this has led to a more considerate area of increasing concern and priority for investors which may affect how investors perceive climate-related risks in the entity’s financial statements. The sector is most vulnerable to climate risk in agriculture, which could cost thousands of jobless workers. We could not ignore the fact if catastrophic wildfires take a large economic toll on communities through property losses and the long-term structure of the local economy. 

Thus, to make sure that this issue has been handled properly, businesses has considered the cruciality of financial reporting for business to help climate change continuing risk. Sustainability reporting allows private companies, public and third sectors organizations, to affirm their mission and pursued values, to acknowledge and measure their economic, environmental, social and governance performance and improvement, and accordingly to set goals and develop strategies in order to make the management of the organization more sustainable and efficient, and to manage change more effectively.

Financial reporting should reflect reasonable assumptions about climate risk and the transition to sustainability. Where they do not, investors and clients are committed to sustainability and demand factual results on risk and return. According to ( Ross 2021 ) Audit committees need to be fully aware of this. The shareowners will be paying attention. Accountability on accounting is the missing link in the capital markets. Accounting and auditing are key tools to communicate reliable climate information to investors and the market. There are steps to diversified investors concerned about systematic risks and also to know how a company is mitigating or contributing, climate risk. And we’ve listed it all for you : 


- Fully enforce existing accounting and related disclosure requirements to reflect the financial impacts of the climate crisis and the transition to a low-carbon economy.

- Update disclosure, through a staff accounting bulletin and other guidance and rulemaking, to spread identified best practices about material climate-related information across industries and markets.

- Leverage the audit to build a solid bridge between climate-related risks and corporate financial reporting.


Indonesia has adopted this system through IFRS ( International Financial Reporting Standards ). By adopting IFRS, Indonesia will benefit from utilizing the Indonesian capital market in the eyes of global investors, expanding cross-border investment markets, increasing the efficiency of capital allocation, and enforcing sustainability through accounting. Therefore, Moores Rowland Indonesia is giving our clients certainty of our sustainability assurance to mitigate the corporate risks associated with the potential disclosure of inaccurate or misleading information and obtain a limited level of sustainability assurance in order to provide confidence to report to readers of the reduction of risks or errors to a very low level, although not necessarily to zero.


           Moores Rowland Indonesia is in undertaking its assurance assignments to provide credibility to company sustainability reports, Moores Rowland utilizes the following Assurance Standards:​

  • International Standard on Assurance Engagements (ISAE) 3000 Revised, Assurance Engagements Other than Audits or Reviews of Historical Financial Information.

Meanwhile, the criteria used are:

  • GRI Standards;
  • International Standard on Assurance Engagements (ISAE) 3000, “Assurance Engagements other than Audits or Reviews of Historical Financial Information”; our company has processed large volumes of confidential information and we have the capability to handle large processes data. 

As an Organizational Stakeholder of GRI, Moores Rowland is also a promoter of the whole concept of sustainability reporting and provides consultancy as well as training to both business executives and government officials on what responsible sustainability reporting actually entails.

Basically, Sustainability Reporting is reporting on the economic, environmental, and social policies, impacts, and performance of an organization and its products in the context of sustainable development. Commonly referred to as Triple Bottom Line Reporting, it underlines the fact that in carrying out its operations a company has responsibilities to the environment and society at large as well as to its own shareholders

           Our help to provide a scalable plan on economic, social and business risks does help in measuring our effectiveness of green initiatives. We enhance the organization’s internal decision-making process and hence our ability to achieve sustainability objectives. Moores Rowland Indonesia has contributed to putting forward the environment. Because small acts are better than no action. Have you contributed to helping the environment? We have! Contact us to know more about this information.