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1 – 10 of 282Mabrouka Ben Mohamed, Emna Klibi and Salma Damak
This study aims to examine the relationship between corporate social responsibility (CSR) award and sustainability assurance levels for the French CAC 40 companies.
Abstract
Purpose
This study aims to examine the relationship between corporate social responsibility (CSR) award and sustainability assurance levels for the French CAC 40 companies.
Design/methodology/approach
A sample of 57 French companies in the CAC 40 index corresponding to 448 observations was analyzed between 2008 and 2020 using an ordinal regression.
Findings
The main results conclude that the inclusion in the Dow Jones Sustainability Index World, the CSR award and the introduction of the Grenelle 2 law have a significant influence on sustainability assurance levels. However, incentive compensation does not appear to be relevant to explain sustainability assurance levels.
Research limitations/implications
The present study focuses on a sample, limited to companies belonging to the CAC 40 index. To enhance the understanding of sustainability assurance levels, this research may include other global sustainability indices, such as the MSCI World and the FTSE4Good World, in the CSR awards.
Practical implications
This study could be useful for audit practitioners, leading them to reconsider their evaluation methods and take into account CSR incentives for a more objective analysis. Regulators should investigate the current CSR issues to improve CSR disclosure standards. Finally, these findings could motivate other researchers to expand the scope of the research to diverse contexts.
Originality/value
This study helps fill the gap existing in sustainability assurance literature by highlighting the relationship between CSR rewards and sustainability assurance levels.
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Hanen Khaireddine, Isabelle Lacombe and Anis Jarboui
Although the association between sustainability assurance (SA) quality and firm value has been examined in previous studies, the moderating relationship is novel in this study and…
Abstract
Purpose
Although the association between sustainability assurance (SA) quality and firm value has been examined in previous studies, the moderating relationship is novel in this study and highlights the effect of corporate environmental sustainability performance (CESP) on the relationship between SA quality and firm value. This study aims to examine whether such an effect is strengthened or weakened by eco-efficiency, as measured by ISO 14001 certification, aggregate CESP score and each individual dimension of CESP (emission reduction [ER], resource reduction [RR] and product innovation [PI]).
Design/methodology/approach
The sample includes 40 companies in Euronext Paris with the largest market capitalisations (the Cotation Assistée en Continu 40 [CAC 40] index) from 2010 to 2020. The authors apply the feasible generalised least squares regression technique to estimate all the regression models. Because observed associations may be biased by reverse causation or self-selection, the authors use the instrumental variable approach and Heckman two-stage estimation.
Findings
The results show that SA quality had a positive and significant effect on firm value. Second, the authors demonstrate that CESP, as assessed by ISO 14001 certification, has a stronger interaction with assurance quality and acting as a moderator variable. Using the ASSET4 scores, an alternative proxy for CESP, the authors find inconsistent evidence regarding the impact of CESP attributes. The CESP and ER scores are homogeneous and have a positive effect on firm value. However, the PI and RR CESP attributes are not homogenous and do not have the same interactive effect on firm value. The results are robust to the use of an instrumental variable approach and the Heckman two-stage estimation procedure.
Research limitations/implications
Policy implications: Regulators may be interested in the findings when considering current and future assurance requirements for sustainability reporting, and shareholders when considering SA as an investment choice criterion. The insights into and enhanced understanding of the incentives for obtaining high SA quality can help policymakers develop effective policies and initiatives for SA. Considering the possible improvements in sustainability performance when obtaining a high level of sustainability verification, governments need to consider mandating SA.
Practical implications
Firms receive clear confirmation of the importance of investing in SA quality. Financial markets do not evaluate SA dichotomously but reward companies with higher SA quality because of the greater credibility it provides. Firms should allocate a significant percentage of their annual budgets and other relevant resources to environmental training and development programmes to improve and maintain environmental performance. If they care about environmental issues, they must announce this by issuing sustainability reports and seeking assurance of the information disclosed. High-quality assurance not only has a significant effect on investors’ investment reliability judgements but also the perceived credibility of environmental performance fully moderates the effect of assurance on these judgements.
Social implications
This study has social implications; the authors find that the French market rewards firms that provide a high-quality assurance to guarantee the integrity of their sustainability reports. Therefore, by incorporating environmental sustainability into their financial goals, a better assurance ultimately will urge firms to move from green washing to strategic goals, which is beneficial for society. Further, firms that focus on sustainability as part of their business strategy may attract employees who engage in green behaviours at work and create a friendlier and productive environment because it gives meaning to the work they do and keeps them engaged to the level needed to perform their jobs capably.
Originality/value
This study contributes to the literature by re-examining the relationship between SA quality and firm value. It also provides new evidence on the moderating effect of CESP on the SA quality–firm value nexus. Specifically, it explores the joint effect of credibility and eco-efficiency on market confidence in sustainability information.
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Marta Sánchez-Sancho, Jennifer Martínez-Ferrero and Javier Perote-Peña
This paper aims to investigate the potential influence of managers on sustainability assurance. When the quality of sustainability reporting is questionable because of subsequent…
Abstract
Purpose
This paper aims to investigate the potential influence of managers on sustainability assurance. When the quality of sustainability reporting is questionable because of subsequent restatements, the authors explore whether assurance is used to enhance its credibility as a legitimization tool or as an impression management strategy. Additionally, the authors analyze how capital markets react to this potential managerial capture and, particularly, whether investors penalize this practice through the cost of capital.
Design/methodology/approach
Using an international sample from 2012 to 2016 and panel data regressions, this study relies on DICTION’s master variables of optimism and certainty to examine the impact of managers on assurance and the market’s reaction to these practices.
Findings
The study shows that some managers might use assurance as a legitimization tool rather than as a means of reinforcing the credibility of sustainability reporting. In such cases, the results reveal that investors penalize (reward) managerial influence (no influence) on assurance.
Practical implications
The new findings help companies understand that they will not improve their financing terms if investors perceive that managers have influenced assurance. Moreover, these findings emphasize the need for standardization to clarify assurance criteria and prevent managerial influence.
Social implications
Managerial influence on assurance raises doubts about its value in terms of reducing information asymmetry and especially improving investors’ decision-making.
Originality/value
The present study represents the first evidence of the potential use of assurance for non-informative purposes. The authors provide clear evidence of how investors penalize managerial influence on assurance, in contrast to the mainstream literature, which shows that this practice always improves investors’ decision-making and is rewarded.
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This study examines how assurors make sense of sustainability assurance (SA) work and how interactions with assurance team members and clients shape assurors’ sensemaking and…
Abstract
Purpose
This study examines how assurors make sense of sustainability assurance (SA) work and how interactions with assurance team members and clients shape assurors’ sensemaking and their actual SA work.
Design/methodology/approach
To obtain detailed accounts of how SA work occurs on the ground, this study explores three SA engagements by interviewing the main actors involved, both at the client firms and at their Big Four assurance providers.
Findings
Individual assurors’ (i.e. partners and other team members) sensemaking of SA work results in the crafting of their logics of action (LoAs), that is, their meanings about the objectives of SA work and how to conduct it. Without organizational socialization, team members may not arrive at shared meanings and deviate from the team-wide assurance approach. To fulfill their objectives for SA work, assurors may engage in socialization with clients or assume a temporary role. Yet, the role negotiations taking place in the shadows of the scope negotiations determine their default role during the engagement.
Practical implications
Two options are available to help SA statement users gauge the relevance of SA work: either displaying the SA work performed or making it more uniform.
Originality/value
This study theoretically grounds how assurors make sense of SA work and documents how (the lack of) professional socialization, organizational socialization and socialization of frequent interaction partners at the client shape actual SA work. Thereby, it unravels the SA work concealed behind SA statements.
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Nermine Medhioub and Saoussen Boujelbene
This study examines the association between corporate tax avoidance and the cost of debt (COD). It also investigates the moderating effect of integrated report (IR) assurance on…
Abstract
Purpose
This study examines the association between corporate tax avoidance and the cost of debt (COD). It also investigates the moderating effect of integrated report (IR) assurance on tax avoidance/COD relationship.
Design/methodology/approach
Based on a sample of 76 South African companies listed on the Johannesburg Stock Exchange (JSE) from 2010 to 2020, the authors built and estimated regression models using the feasible generalized least squares (FGLS) method. The authors significantly mitigated the endogeneity concerns using propensity score matching (PSM), difference-in-differences (DID) analysis and fixed effects regression.
Findings
The authors found that tax-avoiding firms pay higher costs of debt due to information asymmetries and agency problems. Bankers systematically reflect the increase in tax avoidance by adjusting the COD upward. However, results show that the assured IR disclosure mitigates these problems, which decreases the COD for tax avoidance strategies adopters. Using a quasi-natural experiment, well-grounded evidence was provided showing that the decrease in the COD for debtors who engage in tax avoidance practices is attributed to the availability of an assured IR.
Practical implications
This study provides plausible evidence in favor of the role that an assured IR can play in capital allocation decisions. Consequently, it is likely to push policymakers in South Africa and other countries to set standards for IR assurance.
Originality/value
This is the first study that investigates and validates the role of IR assurance in solving the controversy about the “tax saving effect” vs. “risk exposure effect” that bankers face while identifying debtors with successful (non-risky/cash-saving) tax avoidance practices and those with non-successful (risky) ones.
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Clinton Free, Stewart Jones and Marie-Soleil Tremblay
The purpose of this paper is to synthesize insights from the emerging work in accounting on greenwashing and sustainability assurance and propose an agenda for future research in…
Abstract
Purpose
The purpose of this paper is to synthesize insights from the emerging work in accounting on greenwashing and sustainability assurance and propose an agenda for future research in this area.
Design/methodology/approach
This article offers an original analysis of papers published on greenwashing and sustainability assurance research in the field of accounting. It adopts a systematic literature review and a narrative approach to analyse the dominant themes and key findings in this new and rapidly evolving field. From this overview, specific avenues for future research are identified.
Findings
In the past few years there has been a substantial spike in concern relating to greenwashing among academics, practitioners, regulators and society. This growing concern has only partly been reflected in the research literature. To date, research has primarily focused on: (1) the characteristics of firms adopting sustainability assurance, (2) the challenges facing sustainability auditors, (3) the development of appropriate assurance standards and regulations, and (4) capital market responses to greenwashing and sustainability auditing/assurance. Three key future research issues with respect to greenwashing are identified: (1) the future of standard-setter attempts to regulate greenwashing, (2) professional jockeying in sustainability reporting assurance, and (3) capital market opportunities and challenges relating to greenwashing and assurance.
Originality/value
Despite the profound economic and reputational impact of greenwashing and the rapid development of sustainability assurance services, research in accounting remains fragmented and emergent. This review identifies avenues offering considerable scope for inter-disciplinarity and bridging the divide between academia and practice.
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Ahmed Helmy Mohamed Gomaa Mohamed
The current study aims to analyze the role of International Federation of Accountants (IFAC) in sustainability issues and its impact on the attitude of practitioners (auditors) in…
Abstract
The current study aims to analyze the role of International Federation of Accountants (IFAC) in sustainability issues and its impact on the attitude of practitioners (auditors) in industrial companies. The current study relies on the analytical method, one of the tools of the inductive approach, by examining the literature of researchers, international and local organizations, publications, series, alerts, and topics dealt with by the IFAC, as well as reviewing studies, theoretical and applied research, periodicals, books, and statistics. And specialized publications for this subject, which is related to other sciences – such as – environmental science, economic, and political sciences. The study reached many results, the most important of which are: (1) The first half of the current decade has seen high interest from the IFAC, has led to the issuance of International Auditing and Assurance Standards Board (IAASB) international standard on assurance engagements 3410, (GHG) Statements. (2) Sustainability has become important to a growing number of enterprises, and may have a significant influence, in certain cases, the financial statements, also became the sustainability of the topics under increasing attention from users of financial statements. Thus, the financial statements will need a practitioner to take into consideration sustainability issues and a private greenhouse gas when auditing the financial statements. This study is distinguished by analyzing the role of the IFAC and the IAASB for the period from 1998 to 2023 regarding sustainability issues.
Zeena Mardawi, Aladdin Dwekat, Rasmi Meqbel and Pedro Carmona Ibáñez
Reacting to the calls in the contemporary literature to further examine the relationship between board attributes and firms’ decisions to obtain corporate social responsibility…
Abstract
Purpose
Reacting to the calls in the contemporary literature to further examine the relationship between board attributes and firms’ decisions to obtain corporate social responsibility assurance (CSRA) through the use of pioneering techniques, this study aims to analyse the influence of such attributes together with the existence of a corporate social responsibility (CSR) committee on the adoption of CSRA using fuzzy set qualitative comparative analysis (Fs-QCA).
Design/methodology/approach
Fs-QCA was performed on a sample of nonfinancial European companies listed on the STOXX Europe 600 index over the period 2016–2018.
Findings
The study findings indicate that the decision to obtain a CSRA report depends on a complex combination of the influence of the CSR committee and certain board attributes, such as size, experience, independence, meeting frequency, gender and CEO separation. These attributes play essential contributing roles and, if suitably combined, stimulate the adoption of CSRA.
Practical implications
The study findings are important for policymakers, professionals, organisations and regulators in forming and modifying the rules and guidelines related to CSR committees and board composition.
Originality/value
To the best of the authors’ knowledge, this study represents the first examination of the impact of board attributes and CSR committees on the adoption of CSRA using Fs-QCA method. It also offers a novel methodological contribution to the board-CSRA literature by combining traditional statistical (logistic regression) and Fs-QCA methods. This study emphasises the benefits of Fs-QCA as an alternative to logistic regression analysis. Through the use of these methods, the research illustrates that Fs-QCA offers more detailed and informative results when compared to those obtained through logistic regression analysis. This finding highlights the potential of Fs-QCA to enhance our understanding of complex phenomena in academic research.
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Hamada Elsaid Elmaasrawy and Omar Ikbal Tawfik
This paper aims to examine the impact of the assurance and advisory role of internal audit (ADRIA) on organisational, human and technical proactive measures to enhance…
Abstract
Purpose
This paper aims to examine the impact of the assurance and advisory role of internal audit (ADRIA) on organisational, human and technical proactive measures to enhance cybersecurity (CS).
Design/methodology/approach
The questionnaire was used to collect data for 97 internal auditors (IAu) from the Gulf Cooperation Council countries. The authors used partial least squares (PLS) to test the hypotheses.
Findings
The results show a positive effect of the ADRIA on each of the organisational proactive measures, human proactive measures and technical proactive measures to enhance CS. The study also found a positive effect of the confirmatory role of IA on both human proactive measures and technical proactive measures to enhance CS. No effect of the confirmatory role of IA on the organisational proactive measures is found.
Research limitations/implications
This study focused on only three proactive measures to enhance CS, and this study was limited to the opinions of IAu. In addition, the study was limited to using regression analysis according to the PLS method.
Practical implications
The results of this study show that managers need to consider the influential role of IA as a value-adding activity in reducing CS risks and activating proactive measures. Also, IAu must expand its capabilities, skills and knowledge in CS auditing to provide a bold view of cyber threats. At the same time, the institutions responsible for preparing IA standards should develop standards and guidelines that help IAu to play assurance and advisory roles.
Originality/value
To the best of the authors’ knowledge, this is the first study of its kind that deals with the impact of the assurance and ADRIA on proactive measures to enhance CS. In addition, the study determines the nature of the advisory role and the assurance role of IA to strengthen CS.
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Nadia Gulko, Flor Silvestre Gerardou and Nadeeka Withanage
Corporate Social Responsibility (CSR) reporting has been widely accepted as a vital tool for communicating with stakeholders on a range of social, environmental, and governance…
Abstract
Corporate Social Responsibility (CSR) reporting has been widely accepted as a vital tool for communicating with stakeholders on a range of social, environmental, and governance issues, but how companies define, interpret, apply, integrate, and communicate their CSR efforts and impacts in corporate reporting is anything but a straightforward task. The purpose of this chapter is to explore the concept of materiality in CSR reporting and demonstrate practical examples of good CSR and Sustainable Development Goals (SDGs) reporting practices. We chose the aviation industry because of its economic relevance, constant growth, and future expected changes in the aftermath of COVID-19. In addition, airlines affect many of the SDGs directly and indirectly with contending results. This chapter is timely because of the growing willingness by companies to integrate CSR and environmental, social, and governance (ESG) thinking into the corporate strategy and business operations using materiality assessment and enhancing their competitive advantage and ability to maintain long-term value and because ESG and ethical investing have become part of the mainstream investing. Thus, this chapter contributes to an understanding of the wide range of existing and new reporting frameworks and regulations and reinforces the importance of discussing how this diversity of approaches can affect the work toward worldwide comparability of CSR and sustainability reporting.
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