ISAE 3420
What is ISAE 3420 ?
ISAE 3420, issued by the International Auditing and Assurance Standards Board (IAASB), is an assurance standard that deals with the compilation of pro forma financial information included in a prospectus. It provides a framework for independent auditors or assurance practitioners to evaluate and report whether the pro forma financial information has been properly compiled by management, based on the stated criteria and relevant financial reporting framework. This assurance helps ensure that adjustments made to historical financial information to reflect proposed transactions, such as mergers, acquisitions, or IPOs, are accurate, transparent, and reliable. While ISAE 3420 is not a certificate for companies, organizations often obtain such assurance engagements to strengthen investor confidence, regulatory compliance, and market credibility during public offerings or major financial transactions.
Benefits of ISAE 3420
- Investor Confidence – Provides assurance that pro forma financial information is prepared accurately, increasing transparency and trust among potential investors.
- Regulatory Compliance – Ensures compliance with securities regulators’ requirements when issuing a prospectus for IPOs, mergers, or acquisitions.
- Credibility in Capital Markets – Enhances the credibility of financial disclosures, making it easier for organizations to raise funds and attract stakeholders.
- Risk Reduction – Minimizes the risk of misstatements or misleading financial presentations, protecting both the company and investors.
- Independent Verification – Demonstrates that financial information has been verified by an external, independent auditor or assurance provider.
- Support for Decision-Making – Helps stakeholders make informed decisions by relying on accurate, consistent, and transparent financial data.
Who Can Apply for ISAE 3420 ?
- Companies preparing for an IPO (Initial Public Offering)
- Organizations involved in mergers or acquisitions that need to present pro forma financials in a prospectus
- Listed companies issuing additional securities or raising capital from the public
- Private companies planning to go public and requiring investor-ready financial information
- Financial institutions that need assurance on pro forma statements for regulatory filings
- Corporate groups restructuring or reorganizing their businesses and disclosing adjusted financial information
ISAE 3420 Documents Requirements
- Preferred methods for data collection
- Data collection procedures, tools, and guidance materials
- Compile and review facility data
- Estimate missing data to fill gaps
- Choose emissions factors
- Calculate emissions
- Regulatory Licenses Copy & Certifications
- Management Certification
- Product Certification
- Industry Certification
- Compliance Report License
How Shamkris Group will help you in ISAE 3420 ?
- Consultation and Guidance:
Shamkris Group may provide consultation services, offering guidance on Responsible Steel Certification requirements, methodologies, and best practices for accurate and compliant carbon emissions reporting in the steel production industry.
- Data Management Solutions:
Assistance in developing and implementing robust data management systems to collect, analyze, and report on emissions data for Responsible Steel Certification, ensuring accuracy, reliability, and compliance with the certification standards.
- Training and Capacity Building:
Provision of training programs for employees to enhance their understanding of Responsible Steel Certification, helping ensure the proper implementation of emission reduction practices and alignment with certification standards within the organization.
- Verification Support:
Support in the verification process, which is a crucial aspect of Responsible Steel Certification. This may involve collaborating with third-party verifiers and the National Institute of Secondary Steel Technology (NISST) to ensure that the reported emissions data meets the required standards.
- Technology Integration:
Assistance in adopting and integrating technologies that facilitate efficient and accurate emissions accounting, reporting, and reduction, making the transition to Responsible Steel Certification practices smoother and more effective.
- Stakeholder Engagement:
Strategies to engage stakeholders, including suppliers, customers, and partners, in the Responsible Steel Certification process. This may involve creating communication plans and collaboration initiatives to ensure the successful adoption of sustainable steel production practices.
- Continuous Improvement:
Support in implementing continuous improvement strategies to enhance the accuracy, efficiency, and sustainability of emissions reporting over time, ensuring that steel production continually meets or exceeds Responsible Steel Certification requirements.
- Compliance Management:
Assistance in staying informed about changes in Responsible Steel Certification standards, thresholds, and other relevant regulations, ensuring ongoing compliance and adaptability as the industry moves toward net-zero emissions.
- Customized Reporting Solutions:
Development of tailored reporting solutions to meet the specific needs of steel producers, ensuring their emissions data and sustainability practices are accurately captured and presented in line with Responsible Steel Certification.
- Sustainability Strategy Integration:
Integration of Responsible Steel Certification into the broader sustainability strategy of the organization, aligning emissions reductions with overall corporate environmental goals and positioning the company as a leader in sustainable steel production.