Governance, firm-level characteristics and their impact on the client’s voluntary sustainability disclosures and assurance decisions
Sustainability Accounting, Management and Policy Journal
ISSN: 2040-8021
Article publication date: 2 March 2015
Abstract
Purpose
The purpose of this study is to consider three distinct bodies of literature and uses stakeholder theory as the premise of this study. The first deals with corporate sustainability reporting and voluntary disclosure behaviour, and corporate governance at the firm level, the second deals with the decision to utilize assurance services (voluntary adoption) and the third relates to the choice of auditor/assurance provider.
Design/methodology/approach
This study investigates these issues using archival data from some of the Top 200 listed companies in 2010 from the countries Australia and the UK. The final matched-pair sample consists of 220 listed companies.
Findings
The study finds that audit client size and the strength of corporate governance structures are significant in explaining the decision to produce a standalone sustainability report. Whereas few of these variables provide any explanatory value on the voluntary decision to assure the sustainability report, the existence of an active and diligent audit committee does have positive significance. Finally, the existence of an active and diligent sustainability committee is significant in explaining the choice of assurance provider where a member of the auditing profession was selected by the firm’s management.
Originality/value
Few studies (if any), have found a link between governance characteristics, sustainability report production, and assurance provider. The current study attempts to address this knowledge gap, and also considers the assurance work by professionals outside the auditing profession, and identifies which governance and firm-level characteristics may explain demand for their assurance services. This current study, assists to understand the low incidence of assurance and what might be necessary to increase demand for this type of assurance.
Keywords
Acknowledgements
Thanks to those that participated in the RMIT research seminar series in 2012, and visiting Prof Rob Gray from St Andrews, Scotland.
Citation
Kend, M. (2015), "Governance, firm-level characteristics and their impact on the client’s voluntary sustainability disclosures and assurance decisions", Sustainability Accounting, Management and Policy Journal, Vol. 6 No. 1, pp. 54-78. https://doi.org/10.1108/SAMPJ-12-2013-0061
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited