Determinants of CSR Reporting and Assurance: An Analysis of Top Cooperative and Mutual Organisations

Abstract

Corporate social responsibility (CSR) has greatly influenced business communication. CSR reporting has become the main tool through which organisations worldwide communicate their economic, social and environmental performance. Just as this practice is consolidated, the need for credible information in this area is critical. As a result, some companies subject their CSR reports to an assurance process. Several studies have analysed CSR reporting and assurance among stock companies, but few authors have developed a non-stock firm perspective. Given the shortage of prior research, we analyse these practices, focusing on cooperative and mutual organisations because, as social enterprises, they have a special link with CSR, and they represent another kind of firm with different transaction costs. By combining statistical and content analysis methods, we aim to identify the determinants that influence the adoption of CSR reporting and assurance, the choice of assuror and the quality of assurance statements. The findings reveal that size is positively but non-linearly related to reporting, while country and sector significantly affect the adoption of reporting and assurance. Assurance statements substantially differ across providers and their quality depends on size, sector and assuror, exhibiting interactions between size and assuror and between sector and assuror.

Research on extended external reporting assurance: Trends, themes, and opportunities

“…This association also holds in the Portuguese setting (Branco et al, 2014). On the contrary, prior research finds that firm size is not a significant determinant of assurance for Australian and U.K. listed firms (Kend, 2015), for an international sample of sustainability reporters (Sethi et al, 2017), for international cooperative and mutual organizations (Bollas‐Araya et al, 2019), and for U.S. firms (Cho et al, 2014). These results may be driven by the legal origin of the countries included in the respective samples.…”

“…(2016), Bollas‐Araya et al. (2019), and Simoni et al. (2020) find that firms domiciled in stakeholder‐oriented countries (i.e., code law countries) are more likely to adopt assurance.…”

“…(2015), Wong et al (2016) and Bollas‐Araya et al. (2019) find that size is associated with the decision to use an accounting assurance provider. This may be driven by the perception that accounting assurance providers offer higher quality assurance.…”

Audit Quality, Compensation, Effectiveness of Regulation and Extended External Reporting

“…Bollas‐Araya et al. () document the determinants of the decisions to issue and assure CSR reports and the choice of an assurer. They also investigate the quality of the assurance reports associated with the CSR reports.…”

“…(), Faghani and Gyapong () and Wang (); and Bollas‐Araya et al. (), Sukari and de Villiers () and Ardiana () study issues related to extended external reporting. We begin our editorial, however, by reporting on our recent submission to the inquiry into the regulation of auditing in Australia.…”