The Auditing Profession and the “Valdez Principles”

A consortium of environmental groups and pension fund managers in the United States have recently announced a set of corporate guidelines called the “Valdez Principles”. One guideline calls for firms to prepare annual environmental reports, which would be independently audited. Accountants have a comparative advantage in performing such audits, as well as preparing the underlying reports. This advantage is explained; the potential pitfalls which may hamper the profession are also addressed.