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Quality Assurance in EHS Audits and Audit Programs: The New BEAC Standards

July 2009

Citation: ELR 10594

Author: Ridgway M. Hall, Jr.

How does a chief executive officer (CEO) know when he or she certifies to the accuracy and completeness of the company's annual report, filed with the U.S. Securities and Exchange Commission (SEC), that all of the company's environmental liabilities have been identified and properly characterized and evaluated? If the answer is that he or she relied on a bunch of environmental audit reports prepared by employees or a consulting firm who said they knew the relevant laws, how does the CEO know they got it right? For the auditors, the entities who design and implement auditing and compliance assurance programs, and CEOs and other users, help is on the way.

The practice of environmental, health, and safety (EHS) compliance auditing developed in the late 1970s in response to the wave of complex environmental laws and regulations enacted during that decade by federal and state governments. These regulations carried civil penalties of up to $25, per day of violation, comparable criminal penalties plus jail time for "knowing" violations, and injunctive and administrative sanctions. Especially for companies with facilities in multiple states, each with its own set of air, water, and hazardous and solid waste regulations, keeping abreast of these regulatory requirements was simply not possible without some kind of compliance system backed up by a "self-assessment" or auditing program. Some companies developed compliance assurance programs in-house and others called on law firms or environmental engineering firms to assist in designing and implementing such programs, including the performance of compliance audits.

Ridgway M. Hall Jr. is a senior counsel in the Washington, D.C., office of Crowell & Moring LLP. He is the author of All About Environmental Auditing (Federal Publications, 2d ed. 1992) and a member of the Standards Board of the Board of Environmental, Health and Safety Auditor Certifications. He can be reached at rhall@crowell.com.

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