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Article
Publication date: 19 October 2021

Michael Grassmann, Stephan Fuhrmann and Thomas W. Guenther

Credibility concerns regarding integrated reports can harm the intended decrease of information asymmetry between a firm and its investors. Therefore, it is crucial to…

Abstract

Purpose

Credibility concerns regarding integrated reports can harm the intended decrease of information asymmetry between a firm and its investors. Therefore, it is crucial to examine whether voluntary third-party assurance enhances the credibility of integrated reports and, thus, decreases information asymmetry. Furthermore, this study aims to investigate the interaction effect between assurance quality and the disclosed connectivity of the capitals, a distinguishing feature of integrated reports.

Design/methodology/approach

Content analysis is performed of the 176 assurance statements included in the 269 integrated reports of Forbes Global 2000 firms disclosed from 2013 to 2015 and the 269 integrated reports themselves. Regression analyzes are applied to examine the associations between assurance, the disclosed connectivity of the capitals and information asymmetry.

Findings

The presence of an assurance statement in an integrated report significantly decreases information asymmetry. Surprisingly, assurance quality is not significantly associated with information asymmetry. However, an interaction analysis reveals that combining high assurance quality with high disclosed connectivity of the capitals allows a significant decrease in information asymmetry.

Research limitations/implications

The paper demonstrates that the connectivity of the capitals of integrated reports and assurance quality are connected and together are associated with information asymmetry.

Practical implications

The results imply, both for report preparers and standard setters, that assurance quality is advantageous only when combined with disclosed connectivity of the capitals.

Social implications

More information on non-financial information measured by the connectivity of the capitals of integrated reporting has an interaction effect together with assurance quality on information asymmetry.

Originality/value

This paper builds on a unique data set derived from the contents of integrated reports and accompanying assurance statements. Furthermore, it extends the integrated reporting literature by investigating the interaction between assurance quality and the disclosed connectivity of the capitals, which had not previously been examined in combination.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 1 April 2006

Craig Deegan, Barry J. Cooper and Marita Shelly

The purpose of this paper is to document a study of European and UK triple bottom line (TBL) report assurance statements.

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3218

Abstract

Purpose

The purpose of this paper is to document a study of European and UK triple bottom line (TBL) report assurance statements.

Design/methodology/approach

In undertaking the research, an international database was constructed from which all known European and UK third‐party assurance statements that accompanied the release of TBL reports were selected for review.

Findings

The results of the analysis indicate that there is much variability and ambiguity inherent within the contents of the third‐party statements.

Research limitations/implications

The UK and European reports included within the database compiled by the researchers provide the basis of the information used to develop this paper. In selecting assurance statements to include within the database, the latest TBL report from each reporting organization was obtained (and it should be appreciated that many organizations do not produce TBL reports on an annual basis). Of the 170 reports available internationally at the time the research was undertaken, 8 are from 2000, 86 from 2001, 65 from 2002, and 11 from 2003. Whilst the database is the most extensive one of its type, given the finite nature of resources available, it is stressed that the database is not exhaustive.

Practical implications

Taken together, the results of this analysis lead us to question the value that such assurance statements provide to the TBL reporting process.

Originality/value

Assesses the ambiguity and questions the value of assurance work on TBL statements as currently being undertaken.

Details

Managerial Auditing Journal, vol. 21 no. 4
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 6 June 2016

Md Khokan Bepari and Abu Taher Mollik

This paper aims to critically analyse the content of the assurance statements of corporate sustainability reports to examine the degree to which assurance statements

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2393

Abstract

Purpose

This paper aims to critically analyse the content of the assurance statements of corporate sustainability reports to examine the degree to which assurance statements enhance and uphold organisational transparency and accountability to stakeholders.

Design/methodology/approach

This framework of content analysis draws on a research instrument developed by O’Dwyer and Owen (2005), as well as the most recent assurance guidelines (Global Reporting Initiative) and standards AA1000AS, 2008 and ISAE 3000.

Findings

Due to the lack of stakeholders’ engagement in the assurance process, due to the scope limitation placed on the assurance engagement and due to the reluctance of the assuror to address the assurance statements to the stakeholders groups, sustainability assurance practice cannot be considered as the accountability enabler. With persistent focus on internal systems, process, data generation and data capture, assurance practice is serving more as an internal control tool than as a social accounting/auditing instrument.

Research limitations/implications

A single country context is studied. However, to the extent that assurances are conducted using common sets of assurance standards and guidelines, there is external validity of the findings.

Practical implications

Despite the institutional initiatives by the global and local institutions regarding social and environmental sustainability reporting and assurance, the assurance practice has not yet emerged as a tool of social accountability.

Originality/value

This study provides a comprehensive and up-to-date empirical assessment of the degree to which the sustainability assurance practice encompasses the issue of stakeholders’ interests and forms the potential basis for policy implications to the assurance practice and to the assurance standard setting process.

Details

Managerial Auditing Journal, vol. 31 no. 6/7
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 15 June 2018

Thomas Spencer, Jo Hayden, Peter Murphy and Russ Glennon

The purpose of this paper is to examine the form, content and reporting arrangements of “statements of assurance” required from Fire and Rescue Authorities in England…

Abstract

Purpose

The purpose of this paper is to examine the form, content and reporting arrangements of “statements of assurance” required from Fire and Rescue Authorities in England since their introduction in 2012 and identify potential improvements for future implementation.

Design/methodology/approach

A multi-method approach was adopted which commenced with an analysis of the current official guidance, an exploration of the accessibility and structure of the current statements produced; followed by a review of those statements through a desk based analysis complemented by a series of elite interviews.

Findings

The current guidance was found to be too broad and open to interpretation to be fit for purpose. This has led to some significant variations in reporting, limiting the statements’ usefulness to key users and stakeholders. Most authorities provided some form of report on their website but inconsistencies in respect of length, structure, name and content, limit their value. The research found that 30 per cent of authorities did not have an up to date statement available online. These findings were supported by the series of interviews. The result has led to confusion amongst authorities as to the statement’s role and the risk of it being perceived as a “box ticking” exercise rather than a real contribution to public assurance.

Practical implications

This paper provides potential lessons which could be adopted to inform future guidance in respect of the preparation and publication of the statement of assurance and its role within the wider public assurance regime for fire and rescue authorities. If adopted, these would improve the accountability, transparency and public assurance of Fire and Rescue Authorities which is a key objective of their governance arrangements.

Originality/value

The statement of assurance has only been a requirement of authorities since the current National Framework for Fire and Rescue was published in July 2012 and has not been subject to independent research since its inception. The government have recently issued a consultation on a new national framework, but this proposes changes to the statements of assurance. The findings will therefore be of value to the government, the fire and rescue sector and the recently appointed regulators for the service Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services.

Details

International Journal of Emergency Services, vol. 8 no. 1
Type: Research Article
ISSN: 2047-0894

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Article
Publication date: 1 January 2012

Wendy Green and Qixin Li

This paper aims to examine whether an expectation gap exists between different stakeholders (i.e. emissions preparers, emissions assurers and shareholders) in relation to…

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2564

Abstract

Purpose

This paper aims to examine whether an expectation gap exists between different stakeholders (i.e. emissions preparers, emissions assurers and shareholders) in relation to the assurance of greenhouse gas emissions. Further, the paper seeks to explore whether stakeholder expectations are influenced by the uncertainties inherent in the assurance engagement for different industry sectors (i.e. greenhouse gas emitter or greenhouse gas user entities).

Design/methodology/approach

An experimental survey was used to address the stated aims. Three stakeholder groups: shareholders, greenhouse gas emissions preparers and assurers, completed a survey based on the greenhouse gas emissions assurance for either an emitter or user entity.

Findings

The results provide support for the existence of an expectation gap in the emission assurance setting. Fundamental differences were identified between the stakeholder groups in relation to the responsibilities of the assurer and management; as well as the reliability and decision usefulness of the emissions statement. Moreover, the extent of the gap was found to differ between user entity engagements and emitter entity engagements.

Research limitations/implications

The paper highlights the need for the assurance services profession and assurance standard setters to consider mechanisms to enhance the effectiveness of communicating the assurance function in this setting in order to enhance the credibility and social value of emissions assurance.

Originality/value

The paper is the first to examine the expectation gap in the greenhouse gas emissions assurance context. It thereby also contributes to the literature on the expectation gap in the assurance of non‐financial information. Moreover, the research findings provide standard setters with unique insights into areas to consider as they work toward the development of an international assurance standard for greenhouse gas emissions statements.

Details

Accounting, Auditing & Accountability Journal, vol. 25 no. 1
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 16 July 2018

Géraldine Rivière-Giordano, Sophie Giordano-Spring and Charles H. Cho

The purpose of this study is to examine whether different levels of assurance statements of environmental disclosures affect investment choices in the French context where…

Abstract

Purpose

The purpose of this study is to examine whether different levels of assurance statements of environmental disclosures affect investment choices in the French context where environmental assurance was voluntary until 2012 and became regulated and mandatory since then.

Design/methodology/approach

The authors conducted an experiment during the voluntary context – which represents the vast majority of countries – on a sample of 108 financial analysts.

Findings

Environmental disclosure has a positive impact on investment recommendations. More surprisingly, financial analysts are less likely to give recommendations in favor of a company that displays environmental disclosure with low-level assurance than for a company with no assurance statement at all.

Research limitations/implications

When assurance is voluntary and there are at least two levels, this study results suggest that firms should avoid selecting the lowest level of assurance because it negatively affects investor decisions. From this perspective, firms should devote sufficient effort and resources to obtain at least Level 2 environmental disclosure assurance.

Practical implications

Given the recommendations made by financial analysts, the authors could expect that firms may prefer to engage in a higher level of assurance or to provide no assurance rather than minimize their financial efforts and resources to select a lower level of voluntary assurance regarding environmental disclosure.

Social implications

This study has implications for the voluntary assurance practices of environmental disclosure and can provide support to regulators to promote higher standards in environmental assurance. It documents the relevance to increase the level of requested assurance for environmental disclosure.

Originality/value

To the best of the authors’ knowledge, very few studies have examined the additional effect of assurance on environmental disclosure in investors’ decisions. The experiment is conducted with financial analysts in the context of voluntary assurance.

Details

Sustainability Accounting, Management and Policy Journal, vol. 9 no. 3
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 21 June 2019

Arnold Schneider

The purpose of this paper is to examine whether the level of assurance associated with financial statements affects individual investing decisions.

Abstract

Purpose

The purpose of this paper is to examine whether the level of assurance associated with financial statements affects individual investing decisions.

Design/methodology/approach

A between-subjects behavioral experiment is used with a control condition and three treatment conditions involving different levels of auditor assurance.

Findings

As the level of assurance progresses from none to compilation to review to audit, investors’ perceptions of risk associated with the investment decrease. However, the type of certified public accounting (CPA) firm association did not seem to influence the amounts that individuals were willing to invest.

Research limitations/implications

The results for the investment scenario in this paper cannot necessarily be generalized to other types of investment scenarios. Also, individuals often obtain more information about an investment prospect than what appeared in this study’s questionnaire. Another limitation is that this study did not have economic incentives such as suffering financial losses from poor investing decisions.

Practical implications

Findings about risk assessments suggest that companies might be willing to pay more for greater levels of CPA firm assurance, but the results pertaining to amounts invested suggest that companies need not consider incurring additional costs to obtain more assurance.

Originality/value

No prior study has unambiguously examined the effects of compilations, reviews and audits on investing decisions. This study explores this issue by conducting an experiment whereby investing judgments are compared across groups who received information about one of four levels of auditor assurance.

Details

Journal of Economic and Administrative Sciences, vol. 36 no. 2
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 1 October 2009

B. Ackers

As companies begin accounting for the triple bottom line, external corporate social responsibility (CSR) assurance provides stakeholders with assurance that CSR…

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1196

Abstract

As companies begin accounting for the triple bottom line, external corporate social responsibility (CSR) assurance provides stakeholders with assurance that CSR disclosures may be relied upon. In this way, companies may go some way towards avoiding their CSR efforts simply being perceived as greenwash or a public relations exercise. Several organisations currently provide this assurance, using different methodologies and standards. Using a content analysis, the annual and/or CSR reports of the top 100 South African publicly listed companies were investigated in respect of CSR assurance, and compared with international trends. Despite a slow response, the evidence suggests that CSR assurance prevalence is growing. It was found that despite its developing country status, the prevalence of CSR assurance by South African companies compared favourably with that of their counterparts in developed countries. In South Africa and the UK, the audit profession, led by the “Big 4” firms, is the dominant provider of CSR assurance. As the demand increases, the auditor’s role as a CSR assurance provider is expected to become increasingly more important, especially in South Africa, where the audit profession is highly regarded. This increased demand for assurance services will require the global audit profession’s paradigm to be re‐examined to include competence in contextual accounting and auditing.

Details

Meditari Accountancy Research, vol. 17 no. 2
Type: Research Article
ISSN: 1022-2529

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Article
Publication date: 28 January 2014

Peter Jones, David Hillier and Daphne Comfort

The purpose of this paper is to offer an exploratory assessment of the employment of assurance in the Corporate Social Responsibility (CSR)/Sustainability reports

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3964

Abstract

Purpose

The purpose of this paper is to offer an exploratory assessment of the employment of assurance in the Corporate Social Responsibility (CSR)/Sustainability reports published by the UK's top ten food retailers.

Design/methodology/approach

The paper begins with an outline of the characteristics of assurance and the empirical information for the paper is drawn from the assurance material in the CSR/Sustainability reports posted on the internet by five of the selected retailers.

Findings

The findings reveal considerable variation in the nature and the scope of the assurance processes undertaken, at best the accent is on limited assurance and some concerns are expressed about the independence of the assessment process. The paper concludes that these concerns can be seen to reduce the reliability and credibility of the assurance process.

Originality/value

The paper provides an accessible review of how the UK's top ten food retailers are employing external assurance statements as part of their CSR reporting and as such it will interest academics, managers within the retail industry and those professionals and consultants who work with the industry.

Details

Corporate Governance, vol. 14 no. 1
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 20 March 2019

Charika Channuntapipat, Anna Samsonova-Taddei and Stuart Turley

The purpose of this paper is to understand sustainability assurance (SA), and diversity in that practice, by examining assurance providers’ understandings of the practice…

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1078

Abstract

Purpose

The purpose of this paper is to understand sustainability assurance (SA), and diversity in that practice, by examining assurance providers’ understandings of the practice and the influences that those understandings have on the actual assurance process. It focuses on the issues beyond the content of statements in SA reports.

Design/methodology/approach

This paper employs semi-structured interviews, supplemented by textual data sources. Research participants are assurance providers in the UK, including those within and outside the accounting profession. Drawing on the perspective of actor-network theory, the study focuses on the associations between different actors and how those shape the assurance practice.

Findings

The findings indicate that providers’ understandings of SA practice vary significantly. This variation has a major effect on how the assurance practice is conducted. The study identifies four types of SA engagements, which are designated as: social assurance, integrated assurance, formative assurance and compliance assurance. Such a categorization provides a broad-based understanding of the operationalization of SA and the degree of heterogeneity within it.

Originality/value

This paper extends the understanding of SA by focusing on the practice beyond the statements made by assurance providers, which have been the predominant focus of analysis in the existing literature, and by offering a categorization of the diversity in practice. The focus on the associations between assurance providers and other actors provides a new perspective for exploring the fundamentals of the practice.

Details

Accounting, Auditing & Accountability Journal, vol. 32 no. 2
Type: Research Article
ISSN: 0951-3574

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