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Enhancing Emissions Offset Project Evaluation Through Forest Inventory Quality Assurance Systems - Western Mensurationis

This presentation at the Western Mensurationists Meeting in 2013 explores the integration of quality assurance practices from auditing into forest inventory processes for emissions offset projects. Key topics covered include the knowledge of forest inventory professionals and auditors on quality assurance, potential benefits of cross-disciplinary ideas, risk factors in the system, and tools for data testing. The session also delves into a sample size framework adapted from financial auditing principles and its applicability in assessing and improving quantitative procedures. For further information and inquiries, contact Zane Haxtema via email or phone provided. Supplementary slides on the sample size framework are available for reference, enhancing the understanding of audit risk, allowable risk, inherent risk, and control risk in the context of emissions offset project auditing.

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Enhancing Emissions Offset Project Evaluation Through Forest Inventory Quality Assurance Systems - Western Mensurationis

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  1. Emissions offset project auditing as quality assurance discipline: a forest inventory perspective 2013 Western Mensurationists Meeting, Leavenworth, WA 25 June 2013

  2. Three questions: • What do forest inventory professionals know about quality assurance? • What do auditors know about quality assurance? • Can quality assurance ideas from the world of auditing be of any interest in a forest inventory setting?

  3. “Timber cruiser”, Ken Brauner, 1992 http://www.kenbrauner.com/home/kb1/page_477_218/timber_cruiser_art_print.html 

  4. http://www.zazzle.com 

  5. Emissions offset projects http://commons.wikimedia.org/wiki/File:Smokestacks_3958.jpg http://commons.wikimedia.org/wiki/File:Douglas_Firs_Mount_Hood_National_Forest.jpg

  6. The number (usually expressed in metric tonnes CO2-equivalent)

  7. The number (usually expressed in metric tonnes CO2-equivalent) • Spreadsheets • Access/SQL Server databases • Scripted processes • Modeling software (e.g., growth-and-yield models)

  8. A framework for quality assurance (Adapted from financial auditing methods via ISO 14064-3:2006)

  9. Complexity of the system • Multiple forest inventories? • Different growth models?

  10. Key risks in the system • Manual transfer errors • Spreadsheet calculation errors • Errors in software operation

  11. Quality control processes • Built-in data validation? • Manual quality control checks? • Sniff test?

  12. Remaining areas of risk • Focus on biggest areas of “residual” risk • Likelihood of residual risk determines how much to check

  13. Tools for data testing

  14. Vouching

  15. Retracing

  16. Recomputation

  17. The number (usually expressed in metric tonnes CO2-equivalent) • Spreadsheets • Access/SQL Server databases • Scripted processes • Modeling software (e.g., growth-and-yield models) • Measured forest inventory data • Assumptions/parameters • Other input values

  18. Tools from emissions offset auditing can: • Help us to strategically assess our own quantitative procedures for weakness and possible improvements. • Facilitate critical evaluation of data originating from within other organizations (or even our own organization)

  19. Questions? Zane Haxtema zhaxtema@scsglobalservices.com +1-510-292-5968 direct zane.haxtema Skype

  20. Supplementary Slides

  21. A sample size framework (Adapted from financial auditing principles*) MAR = AR / (IR * CR) MAR = Max. audit risk (risk that errors not caught by audit) AR = allowable risk (acceptable risk of a “false positive”) IR = Inherent risk (inherent risk of errors occurring) CR = Control risk (risk that errors not caught by controls) *As specifically described in PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

  22. A sample size framework (Adapted from financial auditing principles*) MAR = AR / (IR * CR) MAR = Max. audit risk (risk that errors not caught by audit) AR = allowable risk (acceptable risk of a “false positive”) IR = Inherent risk (inherent risk of errors occurring) CR = Control risk (risk that errors not caught by controls) *As specifically described in PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

  23. A sample size framework (Adapted from financial auditing principles*) MAR = AR / (IR * CR) MAR = Max. audit risk (risk that errors not caught by audit) AR = allowable risk (acceptable risk of a “false positive”) IR = Inherent risk (inherent risk of errors occurring) CR = Control risk (risk that errors not caught by controls) *As specifically described in PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

  24. A sample size framework (Adapted from financial auditing principles*) MAR = AR / (IR * CR) MAR = Max. audit risk (risk that errors not caught by audit) AR = allowable risk (acceptable risk of a “false positive”) IR = Inherent risk (inherent risk of errors occurring) CR = Control risk (risk that errors not caught by controls) *As specifically described in PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

  25. A sample size framework (Adapted from financial auditing principles*) MAR = AR / (IR * CR) MAR = Max. audit risk (risk that errors not caught by audit) AR = allowable risk (acceptable risk of a “false positive”) IR = Inherent risk (inherent risk of errors occurring) CR = Control risk (risk that errors not caught by controls) *As specifically described in PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

  26. A sample size framework (Adapted from financial auditing principles*) MAR = AR / (IR * CR) MAR = Max. audit risk (risk that errors not caught by audit) AR = allowable risk (acceptable risk of a “false positive”) IR = Inherent risk (inherent risk of errors occurring) CR = Control risk (risk that errors not caught by controls) *As specifically described in PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

  27. An example... Allowable risk = 5% Inherent risk = 50% Control risk = 10% Maximum audit risk = 5% / (50% * 10%) = 100%

  28. A sample size framework (Adapted from financial auditing principles*) MAR = AR / (IR * CR) MAR = Max. audit risk (risk that errors not caught by audit) AR = allowable risk (acceptable risk of a “false positive”) IR = Inherent risk (inherent risk of errors occurring) CR = Control risk (risk that errors not caught by controls) *As specifically described in PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

  29. Adapted from Table 1, PCAOB AU Section 350, accessed online 13 June 2013 at http://pcaobus.org/standards/auditing/pages/au350.aspx

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