How Does Combined Assurance Affect the Reliability of Integrated Reports and Investors’ Judgments?

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

“…Only one experimental study investigates combined assurance. Hoang and Phang (2020) find that when reliability risks are high, combined assurance restores investors’ perceived reliability of reported information to a greater extent than when reliability risks are low.…”

“…Nine of the 15 experimental articles investigate the investor as the decision‐maker. In general, participants are required to make stock price assessments (Brown‐Liburd & Zamora, 2015; Coram et al, 2009) or indicate their willingness to invest (Cheng et al, 2015; Dilla et al, 2019; Hoang & Phang, 2020; Reimsbach et al, 2018; Shen et al, 2017; Stuart et al, 2020). Other investor decisions include an assessment of CSR report credibility (Hoang & Phang, 2020; Hodge et al, 2009; Shen et al., 2017) and the perceived importance of ESG indicators (Cheng et al., 2015).…”

Impacts of combined assurance on integrated, sustainability and financial reporting qualities: Evidence from listed companies in South Africa

“…This study expects CA, which relies on the coordination of all assurance mechanisms (Hoang & Phang, 2020; Maroun & Prinsloo, 2020; Zhou et al, 2019), to be an effective assurance tool for FR quality that could cover both REM and accrual earnings management practices. Accordingly, the following hypothesis is proposed.H3 CA quality positively impacts the quality of FR.…”

“…In contrast to single assurance models (i.e., financial statement audits and ESG assurance), CA intends to deal with the increasingly complex nature of organisations, including the various levels and players in the assurance area, reduce assurance fatigue, eliminate unnecessary assurance for corporate‐wide risk mitigation and enhance reporting quality (Decaux & Sarens, 2015; Huibers, 2015; Sarens et al, 2012; Zhou et al, 2019). In this model, ‘audit committee coordinates the assurance roles of management, internal assurance and external assurance providers, and concludes on the effectiveness of risk management, internal controls and reporting quality’ (Hoang & Phang, 2020, p. 1). Zhou et al (2019) suggested that CA is a cost‐effective means of modern assurance framework, which is valuable in advancing reported information's quality and credibility.…”

“…Although CA has gained momentum due to its perceived and recognised benefits (Deloitte, 2018; KPMG, 2016), comprehensive empirical research on CA's appropriateness for quality external reporting is still scarce (Hoang & Phang, 2020). Although IR conceptually encompasses FR and ESG reporting, in practice, IR cannot be simply considered as a combination of the two reporting (King, 2018).…”