4.6 - Audit Procedures Designed to Address the Risks Associated With Possible Impairment due to Climate-related Risks Flashcards
What is the first audit procedure designed to address the risks associated with possible impairment due to climate-related risks?
Review management accounts/published financial statements for poorly performing parts of the company which are subject to extra taxation or other costs as a result of climate-related factors
What is the second audit procedure designed to address the risks associated with possible impairment due to climate-related risks?
Seek representations from management regarding changes to a company’s business model which may result in certain technologies or facilities becoming obsolete
What is the third audit procedure designed to address the risks associated with possible impairment due to climate-related risks?
Review revenue streams for a manufacturer in order to identify poorly performing production lines which may not have a viable future due to the nature of their products (e.g single-use plastics)
What is the fourth audit procedure designed to address the risks associated with possible impairment due to climate-related risks?
Identify vehicles that are registered to be responsible for pollution due to age or engine-type and discuss their future with management
What is the fifth audit procedure designed to address the risks associated with possible impairment due to climate-related risks?
Discuss with management (in consultation with an auditor’s expert) the existence of products or services which are subject to environmental charges for evidence of impairement
What is the sixth audit procedure designed to address the risks associated with possible impairment due to climate-related risks?
Apply sensitivity analysis to any variables used by management in their estimates for impairment allowances
