Mitigating information asymmetry through sustainability assurance: The role of accountants and levels of assurance

Cuadrado‐Ballesteros, Beatriz; Martínez‐Ferrero, Jennifer; García‐Sánchez, Isabel‐María

doi:10.1016/j.ibusrev.2017.04.009

Cited by 99 publications

(147 citation statements)

References 73 publications

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“…Pflugrath et al () and Hodge et al () state that assured sustainability reports are perceived with a higher reliability than without assurance. Several studies establishing econometric models based on multivariate analysis support these findings (Cuadrado‐Ballesteros, Martínez‐Ferrero, & García‐Sánchez, ; Martínez‐Ferrero & García‐Sánchez, ; García‐Sánchez, Hussain, Martínez‐Ferrero, & Ruiz‐Barbadillo, ).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 82%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 98%

“…Cuadrado‐Ballesteros et al () and Fuhrmann, Ott, Looks, and Guenther () find a reduced information asymmetry when ESG reports are assured, indicating the value relevance of assurance. Furthermore, Cuadrado‐Ballesteros et al () find a moderating role of assurance providers depending on the institutional context, as their findings show that assurance is valued more in stakeholder‐oriented countries. Other studies obtain indications for the value relevance of sustainability assurance by finding lower capital constraints for companies that disclose assured ESG reports (García‐Sánchez, Hussain, et al, ; Martínez‐Ferrero & García‐Sánchez, ).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 98%

“…Furthermore, O'Dwyer () examines the difficulties in creating a new assurance practice and sees a competition between the types of assurance providers: those with accounting and “non‐accounting” backgrounds. Several studies analyze the impact of the assurance providers on the credibility of ESG reports and state assurance provided by a professional accountant as more credible (Cuadrado‐Ballesteros et al, ; García‐Sánchez, Hussain, et al, ; Martínez‐Ferrero & García‐Sánchez, ; Simnett, Vanstraelen, & Chua, ).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…To summarize the presented review of IR and assurance literature, there are several gaps in existing literature: In general, there is a dearth of studies dealing with the value relevance of IR. Furthermore, although there are several studies examining the value relevance of assurance as presented above (Cheng et al, ; Coram et al, ; García‐Sánchez, Hussain, et al, ) and existing studies regarding the influence of the assurance practitioner (Cuadrado‐Ballesteros et al, ; Hodge et al, ; Martínez‐Ferrero & García‐Sánchez, ; Pflugrath et al, ; Simnett et al, ), there is no study with regard to IR.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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Integrated reporting of environmental, social, and governance and financial data: Does the market value integrated reports?

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The concept of reporting nonfinancial information within the annual report, so-called Integrated Reporting (IR) is a rising topic in reporting practice. Supporters claim that IR provides a better view regarding the value creation of a firm.This study investigates the value relevance of IR and the influence of certain characteristics such as assurance. Thus, this paper contributes to the existing literature by examining the actual advantages for firms when adopting an IR approach.The Ohlson model is applied for the market valuation of 50 companies of the STOXX Europe 50 between the years 2010 and 2016. The results of this study support the cost-concerned school by showing a negative influence on the market value. Nonetheless, the study suggests that the quality of the reports is relevant for market valuation, as the negative effect is mitigated by the quality of the reports.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 82%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 98%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 98%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

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Integrated reporting of environmental, social, and governance and financial data: Does the market value integrated reports?

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Integrated thinking and sustainability reporting assurance: International evidence

2021

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Recently, there has been increasing demand by stakeholders for firms to demonstrate how they create value within the context of their operating environment. Consequently, a new reporting approach, integrated reporting (IR), was conceptualised with its development linked to the firm's integrated thinking (IT). Yet very little is known about the effects of IT on firms' reporting decisions. Hence, we investigate whether IT influences firms' decision to publish an assured sustainability report. Using an international dataset, we find that IT is positively associated with sustainability reporting assurance. We also find that this association is moderated by the type of legal system such that for firms in code law countries, the IT effects are reduced.Nevertheless, the effects of IT remain strong, indicating that IT is important for reporting decisions regardless of the firm's contextual setting. These findings have implications for policymakers and organisations interested in promoting high-quality sustainability reporting.

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Sustainability assurance and corporate environmental accountability

Lemma,

Negash,

Lulseged

et al. 2023

Bus Strat Env

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This study explores the institutional field of sustainability assurance in South Africa to explain how this emerging practice, largely embedded in the mature field of auditing, operates. Employing the institutional pillars approach to analyze data obtained from in‐depth interviews, archival sources, and documentary reviews, the study shows mechanisms by which governing norms of the sustainability assurance field in South Africa are maintained despite a conspicuous gap between the desired purpose of sustainability assurance and its actual practice. Building on prior research on capture of sustainability assurance field, we identify an institutional outcome of total—that is, managerial and professional—capture conditioned by (1) malleability of the objective and scope of sustainability assurance engagements and (2) inadequate regulative pillars that failed to manage the multiple and competing interests in the sustainability assurance field. We show that total capture enabled maintaining field norms of sustainability assurance that cater for the interests of assurors and clients with limited regard to enhancing corporate environmental sustainability. The study contributes to the literature by highlighting the institutional outcome of embedding the emerging practice of sustainability assurance in an established field of auditing in a setting with weak regulative pillars.

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Mitigating information asymmetry through sustainability assurance: The role of accountants and levels of assurance

Cited by 99 publications

References 73 publications

Integrated reporting of environmental, social, and governance and financial data: Does the market value integrated reports?

Integrated reporting of environmental, social, and governance and financial data: Does the market value integrated reports?

Integrated thinking and sustainability reporting assurance: International evidence

Sustainability assurance and corporate environmental accountability

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