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Center for Audit Quality Expresses Support for Auditor Assurance Over Company-Prepared Climate Disclosures to Enhance Reliability, Investor Protection

Monday, June 14, 2021

In comment letter, CAQ also supports a global reporting system and standard setter to help ensure ESG and climate information’s usefulness, comparability

June 14, 2021, Washington, D.C. — The Center for Audit Quality (CAQ) in a comment letter to the Securities and Exchange Commission (SEC) voiced support for a globally accepted ESG reporting system built from existing standards and frameworks that can be adapted to meet the needs of investors in different jurisdictions. In its response to the SEC’s request for public input on climate change disclosures, the CAQ also shared their view that assurance of climate-related and other company-prepared Environmental, Social, and Governance (ESG) information performed by a public company auditor can enhance the reliability of this information and offer increased investor protection.

“ESG reporting is no longer an emerging trend, but has become necessary information that investors have come to expect,” said Julie Bell Lindsay, Executive Director of the CAQ. “Public company auditors, in their public interest role, are uniquely equipped to draw on the same capabilities that underpin the high-quality U.S. financial reporting system to promote the flow of comparable, reliable ESG reporting that secures investor protection and confidence.”

The auditing profession has acknowledged the value of ESG information to investors and other market stakeholders and in their public interest role have been working to help the market obtain reliable information on which to base decisions. The reliability of ESG reporting is just one critical issue to aid investors in evaluating ESG information; comparability also proves essential to investor trust and confidence. A CAQ analysis found that 11 percent of S&P 100 companies obtain some degree of ESG reporting assurance from a public company auditor.

“The CAQ supports the SEC’s important work to seek input on climate disclosures and other ESG matters to meet investors’ information needs,” said Lindsay. “The well-established structure and standards that exist in the U.S. for reporting on a company’s financial performance and the effectiveness of internal controls over financial reporting provide important building blocks when considering the standards and assurance of ESG and climate-related reporting.”

In the comment letter, the CAQ also acknowledges that if the SEC determines that it is appropriate to require issuers to make certain climate-related disclosures, staff should consider the aspects of implementation, including transition periods, needed for issuers to reliably report such information.

The CAQ’s full comment letter is here.


About The Center for Audit Quality
The Center for Audit Quality (CAQ) is an autonomous public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high-quality performance by public company auditors; convenes and collaborates with other stakeholders to advance the discussion of critical issues that require action and intervention; and advocates policies and standards that promote public company auditors’ objectivity, effectiveness, and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit

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