SUMMARY In this study, we report two 2 × 2 between-subjects experiments that investigate the effect of strategic relevance of reported sustainability information and its assurance on nonprofessional investors' investment decisions. The first experiment manipulates strategic relevance of reported environmental, social, and governance (ESG) indicators between “high” and “low” by varying the company strategy (sustainability-based differentiation strategy versus cost leadership strategy unrelated to sustainability). The second experiment manipulates the strategic alignment of the ESG indicators (holding strategy constant). We also manipulate the presence (absence) of assurance in both experiments. Results from both experiments document that investors perceive ESG indicators to be more important, and are more willing to invest in the company if ESG indicators have higher strategic relevance. Experiment one also provides evidence that assurance increases investors' willingness to invest to a greater extent when ESG indicators have high relevance to the company strategy. Our findings suggest that the assurance of ESG indicators has a beneficial signaling role in communicating the importance of this reported information to investors.

SUMMARY The need for credible emissions reporting has created international demand for a new and specific type of assurance engagement: assurance of greenhouse gas (GHG) emissions information. This study provides an examination of the international GHG assurance market to identify key potential determinants of both the decision to assure and the choice of assurance provider. As well as providing details on this new assurance service, we extend current knowledge by undertaking a multilevel analysis of both country-level (stakeholder orientation and strength of legal system) and company-level (corporate governance) variables. After correcting for potential self-selection bias, our results reveal significant variations in country patterns for both of these decisions, with both the demand for GHG assurance services and the preference for an accounting profession assurance provider found to be higher in countries with a stakeholder orientation and a less stringent legal enforcement system. Further, we find company-level corporate governance systems and processes to be a significant moderator of the country-level factors for both decisions. JEL Classifications: M42.

SUMMARY:In response to current and increasing demand for assurance on greenhouse gas statements, the International Auditing and Assurance Standards Board (IAASB) released an exposure draft of a new assurance standard, ISAE 3410 ''Assurance on a Greenhouse Gas Statement'' (IFAC 2011), to provide comprehensive guidance on these types of greenhouse gas (GHG) assurance engagements. Internationally, approximately 50 percent of GHG statements are independently assured. The related assurance market is competitive, with the accounting profession and those outside the profession currently holding approximately equal shares. This paper highlights the characteristics of GHG assurance engagements that warrant multi-disciplinary teamwork, the unique and interdependent skill-sets that different practitioners bring to these engagements, and the market forces that create a demand for diverse providers.

In order to improve auditor judgments, it is first necessary to understand and evaluate what successful auditors do differently than those who are less successful. This study uses a computerized research instrument to examine in a single experiment the hypothesis generation, information search, hypothesis evaluation, and final judgment stages of the analytical procedures process. The inclusion of a criterion variable and the ability to search for additional evidence allows the study to examine in which of the various stages of analytical procedures auditors make less-than-optimal judgments. Of the 82 participants, 24 selected the correct cause, 19 never generated the correct cause as a hypothesis, and 39 generated the correct cause as a hypothesis but ended up not selecting it. The incorrect participants were divided into two categories: those who incorrectly selected the inherited hypothesis and those who incorrectly selected another self-generated non-error as the cause. The former group showed deficiencies in both information search and hypothesis evaluation compared to the correct group. The second incorrect group had similar information search patterns to the correct participants but had inferior hypothesis evaluation. These findings therefore lend support to the suggestion by Asare and Wright (2003) that not only is hypothesis generation important, but also information search and hypothesis evaluation are important.

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SUMMARY We investigate how auditors respond to the discipline-specific expertise of team members in undertaking greenhouse gas (GHG) assurance. Assurors conduct these engagements using multidisciplinary teams containing varying technical expertise, with some possessing financial audit-related expertise (“traditional auditors”) and others possessing science- or combined science/financial-related expertise. In an experiment in which traditional auditor participants respond to a simulated multidisciplinary team, we find that participants inappropriately rely on an explanation for an unexpected analytical procedures fluctuation from a senior-level assuror with GHG science-related expertise, irrespective of whether the situation requires that expertise. We also examine whether the review process might provide a solution to this inappropriate reliance, and report nuanced results. That is, we find that while inappropriate reliance on the senior-level assuror with science-related expertise is reduced by having a manager-level reviewer with financial audit-related expertise, inappropriate reliance is even greater when the manager-level reviewer possesses GHG science-related or combined science/financial expertise.

Greenhouse gas (GHG) assurance is increasingly used by companies as a means to increase stakeholder confidence in the quality of externally reported carbon emissions. The multidisciplinary nature of these engagements means that assurance is performed primarily by multidisciplinary teams. Prior research suggests the effectiveness of such teams could be affected by team composition and team processes. We employ a retrospective field study to examine the impact of educational diversity and team member elaboration on multidisciplinary GHG assurance team effectiveness. Results show that team processes such as sufficiency of elaboration on different team member perspectives significantly increases the perceived effectiveness of the teams. While educational diversity is not found to directly improve perceived team effectiveness, it is found to have a positive effect through increasing perceived sufficiency of elaboration. These findings have important implications for standard setters and audit firms undertaking GHG assurance engagements.

During clinical workplace learning, effective communication between veterinary students and clinical staff is of paramount importance to facilitating learning, assessment, and patient care. Although studies in health sciences education have indicated that students may experience communication difficulties as a result of linguistic, cultural, and other factors and that these difficulties can affect clinical learning and academic outcomes, this has not yet been explored in veterinary clinical educational contexts. In this study, the authors sought to identify whether final-year veterinary students perceived that their communication ability influenced their clinical learning and, if so, whether language background was of significance. Seventy-one students from a final-year cohort at an Australian veterinary school completed a student perception survey at the end of their clinical training. Exploratory factor analysis was used to investigate the extent to which learners perceived that their communication ability influenced their clinical learning. Two factors explained 72.3% of total variance. Factor 1 related to communication ability as a source of concern; Factor 2 related to comprehending and contributing to clinical conversations. Communication ability as a source of concern differed significantly ( p < .001) between students who did and did not have an English-speaking background, but there was no significant difference between these two student groups for Factor 2. Although language background was associated with self-perceived communication ability, evidence also emerged that students may experience communication challenges during clinical learning, irrespective of their language background.