Assuring a New Market: The Interplay between Country-Level and Company-Level Factors on the Demand for Greenhouse Gas (GHG) Information Assurance and the Choice of Assurance Provider

Zhou, Shan; Simnett, Roger; Green, Wendy J.

doi:10.2308/ajpt-51414

Cited by 76 publications

(145 citation statements)

References 68 publications

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“…5 Table 1 presents the sample selection process. Consistent with previous studies (KPMG, 2015;Rossi & Tarquinio, 2017;Zhou et al, 2016), the accounting firms take up a marginal majority of shares in the market of carbon emissions assurance. 6 The initial sample included 26,865 companies registered with CDP data from 2010 to 2014.…”

Section: Samplesupporting

confidence: 82%

“…Following prior studies (Depoers, Jeanjean, & Jérôme, 2016;Luo, Lan, & Tang, 2012;Luo & Tang, 2016;Peters & Romi, 2014;Stanny, 2013;Zhou et al, 2016), we use the CDP database to investigate the choice of assurance provider for GHG emissions, which targets large companies that are listed on major stock exchanges worldwide. 4 We believe that CDP data are more comparable than other carbon information sources, because they use a set of standardized questionnaires, and every company answers the same questions in the same manner.…”

Section: Samplementioning

confidence: 99%

“…Investors, regulators, and other stakeholders are demanding more information about climate change to assess its impact on corporate financial systems (KPMG, 2015). While a few studies examine the impact of assurance provider choice on broader sustainability reporting (Casey & Grenier, 2015;Junior, Best, & Cotter, 2014;Martínez-Ferrero & García-Sánchez, 2017b;Mock, Rao, & Srivastava, 2013;O'Dwyer, Owen, & Unerman, 2011;Simnett, Vanstraelen, & Chua, 2009), limited research investigates the choice of assurance provider in the context of carbon emissions (Green, Taylor, & Wu, 2017;Zhou, Simnett, & Green, 2016). While a few studies examine the impact of assurance provider choice on broader sustainability reporting (Casey & Grenier, 2015;Junior, Best, & Cotter, 2014;Martínez-Ferrero & García-Sánchez, 2017b;Mock, Rao, & Srivastava, 2013;O'Dwyer, Owen, & Unerman, 2011;Simnett, Vanstraelen, & Chua, 2009), limited research investigates the choice of assurance provider in the context of carbon emissions (Green, Taylor, & Wu, 2017;Zhou, Simnett, & Green, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Therefore, there is an increasing demand for verified carbon reports provided by experts such as accountants or consultants to reduce information asymmetry between managers and outside investors and stakeholders (Ascui & Lovell, 2012). Prior studies (e.g., Cohen & Simnett, 2015;Green et al, 2017;Mock et al, 2013;Zhou et al, 2016) highlight the importance of research to determine firm-and country-level factors that affect the choice of assurance provider. Prior studies (e.g., Cohen & Simnett, 2015;Green et al, 2017;Mock et al, 2013;Zhou et al, 2016) highlight the importance of research to determine firm-and country-level factors that affect the choice of assurance provider.…”

Section: Introductionmentioning

confidence: 99%

“…Despite some studies on CSR assurance providers, our understanding on carbon assurance providers is very limited (Green & Zhou, 2013;Perego, 2009;Peters & Romi, 2015;Pflugrath et al, 2011;Zhou et al, 2016). When climate threat is imminent with resultant escalation of global warming, corporate carbon management is becoming one of the important dimensions of CSR.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Corporate choice of providers of voluntary carbon assurance

2020

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This study investigates corporate incentives for the choice of assurance providers of accounting firms versus nonaccounting firms. Based on an international sample of 3,635 firm-year observations for the period of 2010-2014, we find that firms subject to greater legitimacy and stakeholder pressure (e.g., those with higher carbon emissions in countries with stringent climate protection and stakeholder-orientation) are more likely to choose accounting firms as their assurance provider. We also find supporting evidence that firms with a desire to improve carbon management mechanisms (e.g., firms that adopt carbon reduction incentives with higher carbon transparency) show a tendency to choose consulting firms specializing in climate change management. The overall findings suggest that the choice of assurance provider is a strategic decision, which aligns with a firm's overall corporate social responsibility goal. Our results should help practitioners, managers, and regulators understand the emerging audit practice and market.

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Section: Samplesupporting

confidence: 82%

Section: Samplementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Corporate choice of providers of voluntary carbon assurance

2020

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The quality of sustainability assurance reports: The expertise and experience of assurance providers as determinants

2018

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The aim of this study was to evaluate the quality of sustainability assurance reports and some aspects associated with it: expertise (a practitioner attribute) and experience (a characteristic of the contractual relationship). Specifically, it examines the impact of the assurance provider's expertise and experience on assurance quality, measured through an index based on a content analysis approach with items related to the reporting format, assurance procedures, and recommendations and opinions. This paper also examines the moderating effect of the type of assurance provider on these relationships. For a sample of international listed companies from the period 2007–14, our evidence shows greater quality of assurance reports when the assurers are industry specialists than when they are nonspecialists, because of their strong industry knowledge, and when the assurers have greater experience in the assurance market because of the extended length of the assurer–client relationship. In addition, the higher quality associated with industry expertise and experience is increased when assurance providers are also accounting firms, given their greater skills and training within the audit profession.

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Board gender diversity and carbon emissions: European evidence on curvilinear relationships and critical mass

2021

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The role of European businesses in addressing environmental issues and climate change has taken center stage with the European Green Deal. With increasing attention to the effect of board gender diversity (BGD) on firms' environmental performance, the question arises whether BGD has any influence on carbon emissions.Based on legitimacy and critical mass theory, this study empirically investigates the impact of BGD on firms' carbon performance (CP), based on total carbon emissions intensity. The paper relies on two-stage least squares (2SLS) regressions with instrumental variable (IV) and a two-step generalized method of moments (GMM) system approach to analyze a cross-country sample of 3123 observations from non-financial firms in the European STOXX600 index over the 2009-2018 period. Our findings add to the growing empirical evidence twofold: (1) there is a robust linear and positive relationship between BGD and CP, whereas some indication of a U-shaped relationship is found; and (2) we find that a critical mass of at least two women directors needs to be reached to increase CP. Our research results contribute to the current discussion on sustainable corporate governance, especially in the European capital market, and have implications for researchers, business practice, and regulatory issues alike.

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Assuring a New Market: The Interplay between Country-Level and Company-Level Factors on the Demand for Greenhouse Gas (GHG) Information Assurance and the Choice of Assurance Provider

Cited by 76 publications

References 68 publications

Corporate choice of providers of voluntary carbon assurance

Corporate choice of providers of voluntary carbon assurance

The quality of sustainability assurance reports: The expertise and experience of assurance providers as determinants

Board gender diversity and carbon emissions: European evidence on curvilinear relationships and critical mass

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