Research on sustainability assurance is still in its beginnings. One of the key questions in this field that also is of the highest practical relevance is concerned with the quality of the assurance process. However, a common understanding of assurance quality and how it should be measured is still missing. We try to close this gap by building on the financial audit literature. We introduce a definition of assurance quality that comprises two key aspects: the depth of the assurance process and the breadth of the assurance statement. Based on prior research, we hypothesize that a firm’s sustainability performance is related to the depth of the assurance process, while the type of the assurance provider, more precisely the affiliation to the accounting profession, is related to the breadth of the assurance statement. Results for a sample of 122 European firms reveal a negative relationship between sustainability performance and assurance process depth as well as between the affiliation to the accounting profession and assurance statement breadth. Thus, we find evidence that poor sustainability performers ask for in-depth assurance services, most likely as a means to enhance their internal sustainability-related processes and systems. Assurance providers that do not belong to the accounting profession in turn are associated with broader assurance statements.
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Our sample covers the reporting year 2011 and we thus refer to the ISAE 3000 as of 2004 (International Auditing and Assurance Standard Board (IAASB) 2004). Note that the standard was revised in 2013 (International Auditing and Assurance Standard Board (IAASB) 2013) and the revised standard became effective for assurance reports dated on or after December 15, 2015.
Instead of “high” and “moderate,” the ISAE 3000 proposes the terms “reasonable” and “limited”.
One may argue that assurance statements provided by the same assurance provider are not independent from each other and we address this concern in the robustness section by including provider fixed effects in our models.
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Conflict of interest
The authors declare that they have no conflict of interests.
See Table 10.
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Hummel, K., Schlick, C. & Fifka, M. The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance Engagements. J Bus Ethics 154, 733–757 (2019). https://doi.org/10.1007/s10551-016-3410-5
- Sustainability assurance
- Sustainability reporting
- Assurance quality
- Content analysis
- Sustainability performance
- Accounting assuror