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A snapshot of sustainability assurance market in New Zealand

Pei-Chi Kelly Hsiao (Waikato Management School, University of Waikato, Hamilton, New Zealand)
Tom Scott (Department of Accounting, Auckland University of Technology, Auckland, New Zealand)
Zeting Zang (Department of Accounting, Auckland University of Technology, Auckland, New Zealand)

Pacific Accounting Review

ISSN: 0114-0582

Article publication date: 27 April 2022

Issue publication date: 23 September 2022

523

Abstract

Purpose

This study aims to provide a snapshot of voluntary sustainability assurance in New Zealand (NZ) in 2020. we assess the frequency of different assurance elements and discuss aspects of current practices that potentially contribute to the audit expectation gap. we also test whether the determinants of voluntary sustainability assurance in NZ are consistent with international findings.

Design/methodology/approach

For 118 companies listed on the New Zealand Stock Exchange in 2020, we hand collected data on whether sustainability information was assured, subject matter assured, assurance level, outcome, provider, disclosure of detailed procedures, standard referenced and criteria applied. we then examine the influences of voluntary sustainability assurance using both univariate and regression analysis.

Findings

Approximately 20% of listed companies that disclosed sustainability information provide a sustainability assurance report, indicating low levels of assurance compared to international practices. we note that the presence of different forms of assurance and certification, placement of sustainability information before financial statements and the associated audit report and mixture of assurance levels potentially contribute to the audit expectation gap. Further, voluntary sustainability assurance practices are diverse, and there are notable differences between Big Four accounting firms and other providers in terms of assurance level and standard referenced. Consistent with prior studies, we find size and industry classification as two main drivers of voluntary sustainability assurance.

Originality/value

We contribute NZ-specific insights to the sustainability assurance literature. The findings on voluntary sustainability assurance practices and reflection on the audit expectation gap are timely and relevant to the new climate-related disclosure mandate and pending assurance requirements.

Keywords

Acknowledgements

We thank Julie Harrison (Editor) and two anonymous reviewers whose helpful suggestions greatly improved the study. We also thank Misha Peters for comments and discussions on earlier versions of the paper.

Citation

Hsiao, P.-C.K., Scott, T. and Zang, Z. (2022), "A snapshot of sustainability assurance market in New Zealand", Pacific Accounting Review, Vol. 34 No. 5, pp. 669-686. https://doi.org/10.1108/PAR-08-2021-0142

Publisher

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Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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