Federal Register of Legislation - Australian Government

Primary content

Other as made
This instrument sets out the ways in which the requirements of the Regulations in relation to auditing knowledge and experience may be met.
Administered by: Environment and Energy
Registered 01 Feb 2017
Tabling HistoryDate
Tabled HR07-Feb-2017
Tabled Senate07-Feb-2017
Date of repeal 01 Jul 2017
Repealed by National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2017

EXPLANATORY STATEMENT

 

 

National Greenhouse and Energy Reporting Regulations 2008

 

National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2016

Introduction

The National Greenhouse and Energy Reporting Act 2007 (the Act) establishes a framework for the conduct of audits under the Act and the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act). Section 75A of the Act requires the Clean Energy Regulator (the Regulator) to register an individual in the register of greenhouse and energy auditors that is kept for the purposes of the Act and the CFI Act if the individual meets specified requirements. The specified requirements are set out in the National Greenhouse and Energy Reporting Regulations 2008 (the Regulations) or a legislative instrument made under regulation 6.72 of the Regulations, and relate to matters such as an applicant’s qualifications, knowledge, expertise, competence and independence. An instrument made under regulation 6.72 of the Regulations may also set out the ways in which requirements set out in the regulations may be met.

The purpose of the National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2016 (the Instrument) is to set out the ways in which the requirements of the Regulations (in relation to the knowledge and experience an applicant for registration as a greenhouse and energy auditor must have) may be met. It also aligns with amendments made to the Regulations by the National Greenhouse and Energy Reporting Amendment (2015 Measures No. 2) Regulation 2015.

The Instrument revokes the National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2012 (the 2012 Instrument). This updated Instrument includes revisions consequential to amendments made to the Regulations in October 2015.

The Instrument is a legislative instrument for the purposes of the Legislation Act 2003. The Instrument will commence on the day after it is registered in the Federal Register of Legislation.

Details of the Instrument are set out in Attachment A.

The statement of compatibility with human rights is set out in Attachment B.

Regulatory Impact

The Office of Best Practice Regulation (OBPR) has advised that a Regulatory Impact Statement is not required (OBPR Reference 20867).

Consultation

Consultation was carried out with selected registered greenhouse and energy auditors representing a number of audit firms  on proposed amendments to the Instrument. Amendments were in relation to the knowledge of audit team leadership and assurance requirements for Category 2 auditors.  Eight submissions were received, and most agreed with the proposed amendments.

 

 

 

Attachment A

Details of the Instrument

Section 1 Name of Instrument

This section provides that the name of the Instrument is the National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2016.

Section 2 Commencement

This section provides that the Instrument commences the day after it is registered on the Federal Register of Legislation.

Section 3 Revocation

This section revokes the National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2012 (the 2012 Instrument).

Section 4 Definitions

This section defines certain terms used throughout the Instrument.

A number of the definitions incorporate by reference other documents. The documents incorporated by reference are:

-          Standard on Assurance Engagements ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information, issued by the Auditing and Assurance Standards Board, June 2014. The standard establishes requirements for undertaking and reporting on assurance engagements other than audits or reviews of historical financial information covered by Australian Auditing Standards or Standards on Review Engagements. At the time the Instrument was made the standard was available free of charge at http://www.auasb.gov.au/Pronouncements/Standards-on-Assurance-Engagements.aspx.

 

-          Standard on Assurance Engagements ASAE 3100 Compliance Engagements, issued by the Auditing and Assurance Standards Board, reissued September 2008. At the time the Instrument was made the standard was available free of charge at

http://www.auasb.gov.au/admin/file/content102/c3/ASAE_3100_9-09-08.pdf.

 

-          Standard on Assurance Engagements ASAE 3410 Assurance Engagements on Greenhouse Gas Statements, issued by the Auditing and Assurance Standards Board, reissued June 2014. At the time the Instrument was made, the standard was available free of charge at http://www.auasb.gov.au/admin/file/content102/c3/Jun14_Standard_on_Assurance_Engagements_ASAE_3410.pdf.

-          AS ISO 14064.2–2006, Greenhouse gases Part 2: Specification with guidance at the project level for quantification and reporting of greenhouse gas emission reductions and removal enhancements, published by Standards Australia Limited, November 2006. This standard provides proponents of greenhouse gas emission reduction projects with an internationally agreed framework for reporting. The standard is available for purchase from Standards Australia Limited.

-          AS ISO 14064.3–2006, Greenhouse gases Part 3: Specification with guidance at the project level for quantification and reporting of greenhouse gas reduction and removal enhancements, published by Standards Australia, November 2006. This standard provides a common approach to verification, validation and certification of greenhouse reductions and removals. The standard is available for purchase from Standards Australia Limited.

-          AS/NZS ISO 19011:2014, Guidelines for auditing management systems by Standards Australia International Ltd and Standards New Zealand, August 2014. The standard provides guidance on the principles of auditing, managing audit programmes, conducting quality management systems audits and environmental management system audits. It also provides guidance on the competence of quality and environmental management system auditors. The standard is available for purchase from Standards Australia Limited.

-          Standard on Related Services ASRS 4400, Agreed-Upon Procedures Engagements to Report Factual Findings, issued by the Auditing and Assurance Standards Board, July 2013. At the time the Instrument was made, the standard was available free of charge from http://www.auasb.gov.au/admin/file/content102/c3/Jul13_Standard_on_Related_Services_ASRS_4400.pdf.

-          International Handbook of Universities, twenty-seventh edition, published by Palgrave Macmillan on behalf of the International Association of Universities, September 2015. The handbook provides detailed information on higher education institutions across the world and can be purchased from Palgrave MacMillan at http://www.palgrave.com/home/index.asp.

-          International Standard on Assurance Engagements 3000 (revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information, set out in the Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, published by the International Federation of Accountants, October 2014, ISBN 978-1-60815-185-1. The purpose of the standard is to establish principles and procedures for, and to provide guidance to, accountants for the performance of assurance engagements other than audits or reviews of historical financial information. The handbook is available free of charge from https://www.ifac.org/publications-resources/2014-handbook-international-quality-control-auditing-review-other-assurance-a.

-          International Standard on Assurance Engagements 3410, Assurance Engagements on Greenhouse Gas Statements, published  by the International Auditing and Assurance Standards Board, March 2012.  The standard provides guidance for assurance engagements to report on an entity’s greenhouse gas statement.  The standard does not deal with, or provide specific guidance for, assurance engagements to report emissions other than greenhouse gas emissions.  The standard is available free of charge at https://www.ifac.org/publications-resources/glance-international-standard-assurance-engagements-isae-3410-assurance-engag.

-          ISO 14064-2:2006, Greenhouse gases -- Part 2: Specification with guidance at the project level for quantification and reporting of greenhouse gas emission reductions or removal enhancements, published by the International Organisation for Standardisation, March 2006. The standard specifies principles and requirements and provides guidance at the project level for quantification, monitoring and reporting of activities intended to cause greenhouse gas emission reductions or removal enhancements. The standard is available for purchase from http://www.iso.org/iso/home.htm.

-          ISO 14064-3:2006 Greenhouse gases -- Part 3: Specification with guidance for the validation and verification of greenhouse gas assertions, published by the International Organisation for Standardisation, March 2006. The document specifies principles and requirements and provides guidance for those conducting or managing the validation and/or verification of greenhouse gas assertions. The standard is available for purchase from http://www.iso.org/iso/home.htm.

-          ISO 19011:2011 Guidelines for auditing management systems, published by the International Organisation for Standardisation, November 2011. The document provides guidance on auditing management systems, including the principles of auditing, managing an audit programme and conducting management system audits. It also provides guidance on the evaluation of competence of individuals involved in the audit process, including the person managing the audit programme, auditors and audit teams. The standard is available for purchase from http://www.iso.org/iso/home.htm.

-          ISO/IEC 17024:2012 Conformity assessment -- General requirements for bodies operating certification of persons, published by the International Organization for Standardization, 2012. The standard specifies requirements for those bodies operating the certification of persons. The standard is available for purchase from http://www.iso.org/iso/home.htm.

Section 5 Object

The object of the Instrument is to set out ways to meet the requirements for knowledge and experience suitable for registration as a greenhouse and energy auditor.

The Regulations establish two categories of registered greenhouse and energy auditors—Category 1 auditors and Category 2 auditors. The categories of auditor have different requirements as to qualifications, knowledge and experience.

Section 6 Degree or equivalent to be conferred by appropriate institution

Regulation 6.11 of the Regulations requires that an individual applying for registration as a greenhouse and energy auditor must have a bachelor’s, master’s or doctoral degree (or equivalent) conferred by an appropriate university or an equivalent institution of higher learning.

This section specifies that an appropriate qualification will be a relevant degree (or equivalent) obtained from either:

                in the case of Australian qualifications—table A and B providers (as listed in section 16-15 and section 16-20 of the Higher Education Support Act 2003); or

                in the case of international qualifications—an international institution listed in the International Handbook of Universities.

The Regulator will be able to accept a qualification which is not a degree if satisfied the qualification is equivalent, such as a professional qualification attained prior to formal degrees being offered in certain disciplines.

Similarly, if an applicant has obtained a qualification from an Australian institution  which is subsequently renamed  amalgamated with another body, or closed), the Regulator may accept a qualification from an institution which is equivalent to those specified.

In the case of a qualification obtained from an international institution, the Regulator will need to be satisfied that the qualification is equivalent to one of those named in the International Handbook of Universities. One method which might provide satisfactory evidence would be a qualification assessment by the Department of Education and Training.

Section 7 Knowledge of relevant legislation for category of auditor

Regulations 6.14 (1) and 6.14A (1) of the Regulations provide that an applicant must have knowledge of the NGER legislation and the CFI legislation which is relevant to the category of auditor for which the applicant has applied to be registered. The terms “NGER legislation” and “CFI legislation” are defined by regulation 1.03 of the Regulations.

Section 7 sets out which provisions of the NGER legislation and CFI legislation are relevant to applicants for Category 1 and Category 2 registration.

The intention of specifying different knowledge requirements is to ensure that an applicant is not obliged to become familiar with all provisions of the NGER and CFI legislation, but rather only with those provisions which will be relevant to the category of registration for which the individual is applying.

Unlike the equivalent section of the previous 2012 Instrument, section 7 does not specify the provisions in the NGER legislation or CFI legislation that an applicant for Category 1 – CFI technical, Category 1 – NGER technical, Category 1 – non-technical or Category 3 registration must have knowledge of. These categories have been removed as a consequence of amendments made to the Regulations, set out in the National Greenhouse and Energy Reporting Amendment (2015 Measures No. 2) Regulation 2015. Any requirements specific to a particular subtype of Category 1 registration have been accounted for.

Section 8 Evidence of knowledge of relevant legislation

Subregulations 6.14 (2) and 6.14A (2) of the Regulations specify that an applicant must provide appropriate evidence that he or she has knowledge of the NGER legislation or CFI legislation relevant to the category of auditor for which the applicant has applied to be registered.

This section specifies that appropriate evidence will consist of a statement provided by the applicant in their application for registration setting out details of their knowledge of the relevant legislation and how this was obtained.

Unlike the previous Instrument, this section now sets out the requirements for knowledge of both NGER legislation and CFI legislation in a in a single section. The former sections 9 (Evidence of knowledge of CFI legislation) and 10 (Evidence of technical knowledge – requirements for registration as a Category 1 – CFI technical) of the previous Instrument have been removed as they were specific to the subtype Category 1 – CFI technical registration. Any technical knowledge an applicant may have, relevant to their knowledge of the CFI legislation, will be obtained through an updated Application for registration as a Greenhouse and Energy Auditor form.

Section 9 Demonstrating knowledge of audit

Subregulation 6.15 (1) provides that an applicant must have knowledge of auditing. Subregulation 6.15 (2) provides that to demonstrate that knowledge, the applicant must, in or with the application, provide the Regulator with appropriate evidence.

Section 9 of the Instrument provides that an applicant’s knowledge of auditing can be evidenced by a statement listing any training courses specified in section 10 they have successfully completed or any qualification listed in section 11 that the applicant has completed. The number reference has changed due to the removal of fomer sections 9 and 10.

Section 10 Evidence of knowledge of auditing—training

This section specifies the training courses that will satisfy the requirement in regulation 6.15 (1) of the Regulations that an applicant must have knowledge of auditing. Such a training course must be delivered by a “competent training provider” within the meaning of section 3 of the Instrument.

References to training courses in conducting an assurance engagement in accordance with ASAE 3410 or ISAE 3410, or in conducting a greenhouse and energy audit in accordance with the Audit Determination have been removed from this section. To the Regulator’s knowledge, there are no such courses. External consultation was also sought from selected registered greenhouse and energy auditors, as representatives from a range of audit firms, and all agreed to the removal of such references.

Section 11 Evidence of knowledge of auditing—qualifications

This section specifies the qualifications that will satisfy the requirement in regulation 6.15 (1) of the Regulations that an applicant must have knowledge of auditing. These requirements are the same as those in the former section 13.

Section 12 Evidence of knowledge of auditing—experience

Subregulation 6.15 (3) of the Regulations specifies that if an applicant does not supply evidence of having audit knowledge referred to in subsection 6.15 (2) (in other words, does not supply evidence of having completed one of the training courses listed in section 10 or holding one of the qualifications listed in section 11 of this Instrument), the applicant may demonstrate his or her knowledge of auditing by complying with regulation 6.15(4).

In order to comply with regulation 6.15 (4) of the Regulations, an applicant must have participated in the appropriate kind and number of audits for the appropriate period and provide written reports by two eligible referees attesting to the quality of that participation.

Section 12 of the Instrument specifies that for paragraph 6.15 (4) (a) of the Regulations, an applicant must have participated for 700 hours in at least five of the kinds of audits mentioned in that section.

Reference to energy audits carried out in accordance with AS/NZS 3598:2000 has been removed from this section as the Regulator no longer considers that this standard is relevant to the experience required for registration as a greenhouse and energy auditor. Audits under this standard relate to the identification of energy efficiency actions rather than verification and assurance of energy and emissions data.

Section 13 Knowledge of audit team leadership and assurance—Category 2 applicants

Subregulation 6.16 (1) of the Regulations provides that an applicant for registration as a Category 2 auditor must have knowledge of audit team leadership and assurance. To demonstrate that knowledge, the applicant must, in or with the application, provide the Regulator with appropriate evidence (subregulation 6.16 (2)).

The effect of section 13 (1) of the Instrument is that an applicant will satisfy the requirements provided for in subregulation 6.16 (1) if he or she is registered as an auditor under section 1280 of the Corporations Act 2001 or has successfully completed one of the specified training courses.

References to training courses in conducting a greenhouse gas verification in accordance with AS ISO 14064.3-2006 or ISO 14064-3:2006, and in conducting a reasonable or limited assurance engagement in accordance with the Audit Determination have been removed from subsection 13 (1). The Regulator no longer considers that such courses provide the required knowledge of assurance for greenhouse and energy auditor registration. Training in this standard does not effectively cover the practice of leading an assurance engagement required for Category 2 auditors, including elements such as establishing the team, determining whether to accept an engagement, dealing with conflicts of interest and using professional judgement. External consultation was also sought from selected registered greenhouse and energy auditors, as representatives from a range of audit firms, and all agreed to the removal of such references.

If an applicant does not satisfy the requirements in subsection 13 (1), an applicant must satisfy the requirements in subsections 13 (2) and 13 (3) of the Instrument. Subsection 13 (2) provides that an applicant has knowledge of audit team leadership if he or she meets the requirements set out in that subsection. Subsection 13 (3) provides that an applicant has knowledge of assurance if he or she has successfully completed a specified course.

Again, reference to a training course in conducting an assurance engagement in accordance with ASAE 3410 or ISAE 3410 has been removed from subsection 13 (3), given the Regulator has no knowledge of such courses existing.

Subsection 13 (4) now provides for any other training or tertiary education an applicant may have successfully completed to be put to the Regulator for consideration in demonstrating their knowledge of assurance.

Section 14 Auditing experience requirements for applicants for Category 1 registration—auditing and preparing audit reports

The effect of subregulation 6.19 (1) of the Regulations is that an applicant for registration as a Category 1 auditor must have the appropriate kind, and the appropriate period, of experience of auditing and preparing audit reports. Subregulation 6.19 (2) provides that the experience must have been obtained during the five years immediately preceding the day the application is made. To demonstrate the experience, the applicant must, in or with the application, provide the Regulator with appropriate evidence.

Section 14 of the Instrument specifies the requirements that must be met by an individual who applies for registration as a Category 1 auditor. These requirements are a combination of requirements in the former sections 16 and 17.

Section 15 Auditing experience requirements for applicants for Category 2 registration—auditing and preparing audit reports

The effect of subregulation 6.20 (1) of the Regulations is that an applicant for registration as a Category 2 auditor must have the appropriate kind, and the appropriate period, of experience of auditing and preparing audit reports. Subsection 15 (1) of the Instrument sets out the ways in which these requirements can be met.

In broad terms, the section provides that an applicant must have obtained at least 700 hours experience in the last 5 years as an audit team leader or a professional member of an audit team in auditing and preparing audit reports in 5 or more specified kinds of audits. The experience must be equivalent to conducting a reasonable assurance engagement or a limited assurance engagement under the Audit Determination.

Section 1.5 of the Audit Determination provides that an “assurance engagement” is a Part 6 audit the purpose of which is to provide the audit team leader’s independent opinion as to the reliability, accuracy and completeness of the matter being audited. There are two kinds of assurance engagement—a reasonable assurance engagement and a limited assurance engagement. These requirements are the same as those in the former section 18.

Section 16 Auditing experience requirements for applicants for Category 2 registration—audit team leadership

The effect of subregulation 6.20 (2) of the Regulations is that an individual who applies for registration as a Category 2 auditor must have had at least the appropriate kind, and the appropriate period, of experience of audit team leadership. Subregulation 6.20(3) of the Regulations provides that the experience of auditing and preparing audit reports and of audit team leadership must have been obtained during the 5 years immediately preceding the day the application is made.

Section 16 sets out the ways in which the requirements of this subregulation may be met. In broad terms, section 16 of the Instrument provides that an applicant must have obtained at least 490 hours experience as an audit team leader of an audit team that has three or more other members in 1 or more of the following kinds of specified audits. The purpose of this requirement is to ensure that an applicant for Category 2 registration has significant experience in leading large audit teams. These requirements are the same as those in the former section 19.

Attachment B

Statement of compatibility with human rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2016

The National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2016 (the Instrument) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Instrument

The National Greenhouse and Energy Regulations 2008 establish two categories of registered greenhouse and energy auditors—Category 1 auditors and Category 2 auditors. The categories of auditor have different requirements as to qualifications, knowledge and experience.

The Instrument sets out the ways in which the requirements of the National Greenhouse and Energy Regulations 2008 in relation to auditing knowledge and experience may be met. The Instrument also revokes the National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2012. 

Human rights implications

The Instrument does not engage any of the applicable rights or freedoms.

Conclusion

The Instrument is compatible with human rights as it does not raise any human rights issues.