The audit shock: Why companies aren’t ready for NGERS and ASRS. 

Summary 

“Companies could be reporting comfortably under NGER without issues. However if they use the same approach to data management when reporting under new Australian Accounting Reporting Standards S2 (Climate-related disclosures), or ASRS, there is a high risk of getting caught out at audit.”

Expectations have changed.

Organisations need to invest in robust data collection and emissions reporting systems to meet these higher standards. 

Key takeaways 

• The shift is from reporting to auditable reporting. 

• Auditors test data integrity, traceability, and methodology. 

• Most systems weren’t built for validation. Some data doesn’t stand up to scrutiny. 

• If your data can’t be validated, it isn’t compliant. 
  

The shift: reporting is no longer enough 

NGER reporting is a compliance task, collect data, apply factors, submit. That’s no longer enough. 

As ASRS rolls out, data must be traceable to source, consistently collected, transparent in calculation, and defensible under audit. 

Auditors aren’t just reviewing numbers, they’re interrogating how they were produced. 

Where companies are getting caught out 

• Data gaps. Fragmented spreadsheets, manual entry, and inconsistent measurement surface as risk at audit. 

• Lack of traceability. Reported figures often can’t be linked to sources – documentation is scattered and assumptions go unrecorded. 

• Over-reliance on estimates. Estimates replace measured data, methodologies shift year to year, assumptions go undocumented. Auditors now test whether estimates are justified. 

• Systems not built for audit. Most produce reports, not withstand an audit – no version control, limited validation, disconnected sources. Retrospectively fixing systems  is unreliable. 

What audit-ready actually looks like 

Audit readiness is built in, not bolted on. Ready organisations typically have: 

• Standardised methodologies and clear calculation boundaries. 

• End-to-end traceability – every figure linked to source, calculations reproducible. 

• Embedded validation – anomaly checks, reconciliation, defined review workflows. 

• Centralised data, version control, and transparent calculation logic. 

Why this needs to be built early 

Many assume audit readiness can wait until the end of the cycle. By then gaps are embedded, assumptions locked, traceability lost – forcing reactive fixes under pressure. 

Building it in early reduces compliance risk, rework, and audit stress. 

How Northmore Gordon supports this transition 

We bridge engineering reality (how energy commodities and emissions are actually measured), knowledge of data systems (how it’s read, transferred, structured and validated), and regulatory frameworks (how laws and regulations apply). 

We identify where processes will fail under audit, design defensible frameworks, and build validation in from the outset. 

Final thought 

If your data can’t be validated, it isn’t compliant. Those who act early will be better placed as NGERNational Greenhouse and Energy Reporting Scheme. Large energy users and greenhouse gas emitters that exceed the thresholds must report their detailed energy and emissions data each year to the Australian Clean Energy Regulator. More and ASRS continue to evolve.

Talk to one of our Senior Advisors to learn more about the auditing pitfalls.