How to Prepare Your Carbon Credit Portfolio for an External Audit
— Audit
Step-by-step guidance on what auditors look for when reviewing voluntary carbon credit holdings — from registry serial numbers to retirement certificates and chain-of-custody documentation.
What Auditors Look For
External auditors reviewing carbon credit holdings test for existence, completeness, accuracy, and cutoff. Existence means the credits appear in the registry. Completeness means all holdings and retirements are recorded. Accuracy means the numbers match the registry statements. Cutoff means retirements are recorded in the correct reporting period.
Required Documentation
For each credit lot, you need: the registry serial number block, the vintage year, the project name and ID, the purchase date and cost, and any transfer history. For each retirement, you need: the retirement date, the number of credits retired, the climate claim statement, and the retirement certificate from the registry.
Reconciliation to Registry Statements
The most important audit procedure is reconciling your internal ledger to the registry account statement. The opening balance plus purchases minus retirements should equal the closing balance. Any difference must be explained and documented.