Answered in full
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Our auditor cannot prepare our climate report. Who should we use?
Short answer
Because your auditor cannot prepare a disclosure they will later assure, the work goes to someone independent of them. Your realistic options are another audit firm outside your auditor’s network, a specialist disclosure preparer, or an in-house build. Independence from your assurance provider is the binding constraint, not size or brand.
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All questions
First. The Corporations Act s 324AA(1) expressly permits a company, registered scheme or retail CCIV to appoint a different auditor for the sustainability report from the auditor of the financial report. Only a registrable superannuation entity is locked to a single auditor, under s 324AA(2). Either way the auditor must be a Registered Company Auditor. Most entities appoint the same firm for connectivity and cost, and that is a sensible default. But it is a choice, and the constraint you have just run into is a consequence of that choice rather than of the statute.
Why your auditor said no
Once a firm holds the assurance engagement, preparing the disclosure it will assure means checking its own work. APES 110 calls that a self-review threat. Where a non-assurance service to a public interest entity audit client would create a self-review threat, the Code treats it as a threat that cannot be eliminated and that safeguards cannot reduce to an acceptable level, so the service is prohibited. Separately, and regardless of entity type, a firm must not assume management responsibility for an audit client. A new Part 5 of APES 110 dealing specifically with sustainability assurance took effect on 1 January 2026, with value-chain provisions from 1 July 2028. Some firms are also declining on capacity, and some on risk appetite. Ask which reason applies to you, because they lead to different next steps.
When a firm can do both, and when it cannot
Three situations, and the answer differs in each.
It cannot, clearly
Your firm will be the assurance provider on the sustainability report, and you are a public interest entity. Preparing the disclosure creates a self-review threat that safeguards cannot address. This is the common Group 1 and Group 2 case.
It depends
Your firm will assure the report and you are not a public interest entity. The firm applies the conceptual framework, evaluates the threat and decides. The management-responsibility prohibition still applies absolutely. Many firms decline anyway, because the risk of being wrong is theirs.
It can
The firm is not your assurance provider and is not in your assurance provider’s network. Then APES 110’s independence provisions do not bind it in relation to you, and the constraint is commercial rather than ethical. Note also that your firm can usually still help while remaining your assurer, if the help stops short of authorship: training your team, explaining the requirements, commenting on a methodology you selected, a readiness assessment, or reviewing a draft you prepared and own.
Which means you have one more option than you probably think
Appointing a separate assurance provider for the sustainability report is legitimate under s 324AA(1) and frees your financial auditor to prepare. It is not the obvious answer and it carries real costs. Two firms means two sets of fees, two engagement teams, and a connectivity problem: your sustainability report and financial report must be consistent, and each auditor may need access to the other’s evidence. ASIC has noted that where auditors cannot access each other’s work a scope limitation can result. But it is on the table, and an audit committee should decide it rather than inherit it.
Your options
Option
Works when
Watch for
Another audit firm, outside your auditor’s network
You want a familiar operating model and audit-grade documentation
Check the network rather than the brand, especially in the mid-tier. Preparing now makes assuring later difficult. Ask whether the team who scopes it is the team who does it
A specialist disclosure preparer
You want the report prepared end to end without building capability, and you want the independence question closed
Ask whether they provide assurance to anyone, whether they produce working papers or only a report, and whether they will deal with your practitioner’s queries
A separate assurance provider, so your usual firm can prepare
Your auditor has the climate capability and you would rather keep the relationship on the preparation side
Two fee bases, connectivity between the reports, and evidence access between the two auditors
In-house
You have several reporting entities, existing sustainability capability, or a multi-year programme
Year one is the worst year to learn. The scarce skill is not carbon accounting, it is knowing what an assurance file has to contain
A software platform alone
You already have the evidence discipline and need calculation, consistency and volume
Software produces a number. It rarely produces the boundary decision, the basis of preparation, the judgement register or the narrative disclosures
Five questions to ask whoever you shortlist
These work regardless of who you choose, and a good provider will not mind any of them.
- Do you provide assurance services to anyone? If so, to whom, and does that touch us or our auditor’s network?
- What exactly do you hand over at the end: a report, or a report plus the working papers behind every number?
- Who deals with our assurance practitioner’s queries, and is that inside the fee?
- Which decisions will you ask us to make and approve, and how are they documented?
- Is the price fixed, and what triggers a variation?
If you do nothing else, do this
Confirm your first reporting period and lodgement date and work the calendar backwards from it. Settle your organisational boundary before your year end, not after it. Start retrieving a full year of source documents now, because that is the item with the longest lead time and no provider can accelerate it for you.
Where Carbonhalo fits
Carbonhalo prepares mandatory climate reports under AASB S2 for Australian businesses filing for the first time, on a fixed-price, done-for-you basis: no new hire, no system integration, and no subject-matter knowledge required on your side. Carbonhalo does not provide assurance to anyone, which is why it sits cleanly on the preparation side of the line, and roughly 95 per cent of its clients arrive as referrals from Big 4 and mid-tier audit firms in exactly the situation described above.
Terms used in this answer
Related questions answered in full
Sources
1
Corporations Act 2001, s 324AA
Commonwealth legislation
Permits a company, registered scheme or retail CCIV to appoint a different auditor for the sustainability report; s 324AA(2) locks a registrable superannuation entity to one.
2
APES 110 Code of Ethics for Professional Accountants (including Independence Standards)
APESB
And the July 2025 amending standard introducing Part 5 for sustainability assurance, effective 1 January 2026 with value-chain provisions from 1 July 2028.
3
RG 280 Sustainability reporting, and FAQs: review or audit of sustainability reports
ASIC
Including the position on scope limitation where auditors cannot access each other’s work.
4
ASSA 5000 General Requirements for Sustainability Assurance Engagements, read with ASSA 5010
AUASB, approved 28 January 2025, amended to July 2025
All web sources fetched or searched 25 August 2026.