Glossary›Assurance, audit evidence and working papers›Estimation uncertainty
Glossary term
Cluster A · A33
Tier 1 · differentiator
Estimation uncertainty
Definition
Estimation uncertainty is the range within which a reported figure could reasonably fall, given the method and data used. It arises wherever emissions are modelled rather than metered, which covers most Scope 3 and some Scope 2. AASB S2 requires disclosure of the judgements and measurement uncertainty affecting reported amounts.
On this page
In practice
Estimation is not a weakness in a climate disclosure; it is unavoidable and the standard expects it. What creates a problem is undisclosed estimation, or estimation presented with a precision it does not have. A Scope 3 figure derived from spend data and industry average factors is not accurate to the tonne and should not be presented as though it is.
The discipline is to say, for each significant estimate, what method was used, what data it rests on, and what would change the answer materially.
What the assurer does with it
The assurer evaluates whether the method is reasonable, whether it was applied consistently, and whether the disclosure gives a reader a fair view of how uncertain the number is. They do not require certainty. They do object to an estimate presented as a measurement, and to a change in estimation method between years that is not disclosed, because that makes the comparison meaningless.
Sources
1
2
ASSA 5000 General Requirements for Sustainability Assurance Engagements
AUASB
Review status
Review required
Last reviewed
15 September 2026
Editorial pass, unsigned
Reviewer required
Registered company auditor
Next scheduled review
1 July 2027
Part of
Cluster A, Assurance, audit evidence and working papers
47 terms on what an assurance provider tests, what they accept as evidence, and what a preparer has to be able to produce.
Related terms
Where each estimation method should be recorded
The techniques that create the uncertainty
The AASB S2 threshold governing how far you must go
Related questions
Can we estimate Scope 3 and still pass assurance?
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Yes. Estimates are expected in Scope 3 and are not a problem for assurance in themselves, because what fails is an undocumented estimate. The practitioner tests whether the method is appropriate and disclosed, the inputs are traceable, the application is consistent, and the estimation uncertainty is described honestly.
Our suppliers will not give us emissions data. What do we do?
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You estimate, and you disclose that you estimated. Nothing in AASB S2 requires primary supplier data, because the standard works on information that is reasonable and supportable and available without undue cost or effort. Rank suppliers by estimated emissions, engage the top of that list, and leave the tail on a documented spend-based method.
What is the difference between spend-based and activity-based, and which does the auditor prefer?
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Activity-based uses physical quantities such as litres or kilowatt hours, while spend-based applies a factor to dollars spent. Activity-based is more accurate and easier to evidence. An assurance practitioner has no preference in principle: they test whether the method you chose is appropriate, disclosed, and applied consistently.
Other terms in this cluster
Estimation uncertainty