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This paper aims to clarify whether assurance on non-financial corporate social responsibility (CSR) reports impacts the perceptions and decisions of banks as capital providers. The authors investigate the effects of the type of assurance provider and the level of assurance provided on decisions by banks to grant credit, make their own personal investments or recommend share purchases to their customers. The study aims to expand the domain of assurance on CSR reports (CSRR) by taking up a call by Cohen and Simnett (2015), who ask for behavioral research on how non-financial report’s intended users interpret and react to assurance.

The paper is based on an experiment case on a fictitious company with a 2 × 2 + 1 between-subjects design. To overcome concerns regarding external validity and to prove results in a real-world setting, the authors selected German bank directors as subjects due to the extremely high relevance of banks to the German economy. The authors investigated the perceptions of 69 bank directors and analyzed the influence of CSR assurance on their decisions.

The findings suggest that assurance positively influences confidence in CSRR and that, consequently, bankers are more likely to make favorable decisions toward the reporting companies, such as approving applications for credit, investing themselves in the company or recommending the purchase of shares to their clients. These effects are stronger when an accounting firm provides the assurance and when the assurance level is reasonable rather than limited.

The arguments presented are, strictly speaking, limited to the case in the experiment and the views held by the bank directors at the time the authors sent out the questionnaires. Moreover, the cell sizes are quite small. Nevertheless, the authors were able to find highly significant results.

The main implication of the paper is that the purchase of CSRR assurance services has a positive effect on bank directors’ perceptions and decisions. They favor the provision of such services by accounting firms and they prefer a reasonable assurance level. Thus, it can be concluded that bank directors perceive quality differences between assurance providers, are able to recognize the difference between reasonable and limited assurance and that the related information is relevant for their decisions.

This paper fulfils an identified need to study the influence of CSRR assurance on decisions by bank directors. The observation of a high decisions-usefulness of CSRR assurance suggests that regulators should consider mandating some form of assurance on non-financial reports throughout the EU member states.

The purpose of this paper is to explore the practice of integrated reporting (IR) assurance from the auditors’ point of view, including the main challenges to be addressed and insights on evolution and potential new assurance approaches.

Based on an exploratory research design, the paper conducted semi-structured interviews with 10 expert auditors, accounting assurance providers and non-accounting assurance providers, in the Italian context, combining an open coding approach with an axial coding approach, and using a three-stage process to organize data.

Respondents confirmed that current IR practices do not represent a real paradigm shift and that the need for in-depth changes in the assurance approach will depend on how these practices evolve. The main challenges highlighted are the absence of suitable criteria, the difficulty of assuring narratives and future-oriented information, and the low level of maturity of internal systems and processes of companies and stakeholders. Proposals for overcoming these challenges are framed mainly within current assurance models, although some respondents pointed out the need for a shift towards new assurance approaches.

The paper relies on a small sample of well-informed subjects active in Italy; thus, the results may not represent the views of all auditors.

The findings identify areas that practitioners and assurance provider firms should focus on, looking to IR assurance and its growing importance and application as a future business area. They may be useful to standard setters and regulators to better understand limits and opportunities of requiring IR assurance on specific information not strictly related to financial information, and for the development of guidance or standards for IR assurance.

This research contributes to the currently underexplored area of IR assurance. Relatively few studies have investigated this topic from an empirical point of view, and no study involving auditors has been carried out in the Italian context.

This paper aims to investigate the current state of knowledge in key reporting aspects in relation to sustainability reporting in general and to reflect on their relevance to Global Reporting Initiative (GRI) in particular. In doing so, the major gaps in that knowledge are identified, and the paper proceeds to suggest further research avenues.

The authors conduct a review of papers published in leading journals concerning sustainability reporting to analyse the progress in the literature regarding three important reporting topics: materiality, comparability and assurance.

The review conducted in this study shows that there is still work to be done to ensure high-quality and consistent sustainability reporting. Key takeaways from the review of the extant literature are as follows: there is ongoing debate about the nature of sustainability reporting materiality, and single versus double materiality. Clearer guidance and better contextualisation are seen as essential for comparability, and, as GRI suggests, there is an important link to materiality that needs to be considered. Finally, assurance has not been mandatory under the GRI, but the current development at EU level might lead to the GRI principles being incorporated in the primary assurance standards.

In this paper, the authors review and synthesise the previous literature on GRI reporting dealing with three key reporting aspects.

The authors extract some takeaways from the literature on materiality, comparability and assurance that will all be key challenges for GRI in the future.

This paper provides an updated review of the literature on GRI reporting dealing with three key reporting aspects.

The existence of internal control for Sharīʿah-compliance promotes reasonable assurance that the Islamic financial institution’s (IFI’s) objectives are achieved in the following categories, namely, the effectiveness and efficiency of operations, the reliability of financial reporting and the level of compliance with applicable laws and regulations, as well as accounting and auditing standards. Sharīʿah non-compliant income (SNCI) is an important issue in IFIs’ operations. Thus, the purpose of this paper is to identify issues related to governance and internal control of SNCI in selected IFIs in Malaysia.

This research uses a case study approach to gather data on the measures of governance and risk management in relation to the internal control for SNCI in IFIs. Interviews were conducted with officers of the Sharīʿah and internal audit departments on internal control practices regarding SNCI.

Regulator’s guidelines on SNCI are simple and brief, lacking rigour in terms of governance, risk management and audit procedures. The section on SNCI is only a brief statement within the Bank Negara Malaysia’s Guidelines on Financial Reporting for Islamic Banking Institutions and also in the Operational Risk Integrated Online Network system operated by IFIs. Most of the respondents in the interviews suggested that there should be a proper guideline in determining the classification of SNCI. Second, although IFIs have established the purification account to manage SNCI, the real practice varies from one IFI to another. Third, although there are supposedly documented procedures established in relation to management and administration of SNCI, the following events still occur in practice, namely, no authorisation from the Sharīʿah Committee (SC) on various types of income channelled to the SNCI account; unauthorised use of SNCI for other purposes; SNCI not being reported in the annual financial reports; and distribution of SNCI prior to obtaining the SC’s consent. Fourth, there is an absence of Sharīʿah risk assessment conducted on operational risk by IFIs to identify any potential Sharīʿah non-compliant event.

This research contributes to the importance of Islamic corporate governance theory and Sharīʿah risk management, as well as strengthening the case for reporting SNCI to shareholders. It also contributes to the body of knowledge on the capability of the management in managing the internal control system of IFIs’ SNCI.

A new internal control assessment matrix is proposed for Sharīʿah-compliance in IFIs.

This study aims to examine how the legitimacy of internal auditing is reconstructed during enterprise resource planning (ERP)-driven technological change.

The study is based on the comparative analysis of internal auditing and its transformation due to ERP implementations at two case firms operating in the food sector in Egypt – one a major Egyptian multinational corporation (MNC) and the other a major domestic company (DC).

Internal auditors (IAs) at MNC saw ERP implementation as an opportunity to reconstruct the legitimacy of internal auditing work by engaging and partnering with actors involved with the ERP change. In doing so, the IAs acquired system certifications and provided line functions and external auditors with data-driven business insights. The “practical coping mechanism” adopted by the IAs led to the acceptance (and legitimacy) of their work. In contrast, IAs at DC adopted a purposeful strategy of disengaging, blaming and rejecting since they were skeptical of the top management team's (TMT's) sincerity. The “disinterestedness” led to the loss of legitimacy in the eyes of the stakeholders.

The article offers two contributions. First, it extends the literature by highlighting a spectrum of behavior displayed by IAs (coping with impending issues vs strategic purposefulness) during ERP-driven technological change. Second, the article contributes to the literature on legitimacy by highlighting four intertwined micro-processes – participating, socializing, learning and role-forging – that contribute to reconstructing the legitimacy of internal auditing.

The objective of this paper is to extend the debate on audit quality in the less complex entity (LCE) context by analyzing comment letters submitted to the International Auditing and Assurance Standards Board (IAASB). The IAASB has drafted a new, stand-alone standard for audits of LCEs’ financial statements.

The Gioia method is utilized to conduct the qualitative analysis. This enables the material to shine and provide a comprehensive picture of the important aspects of the comment letters about the International Standard on Auditing (ISA) for LCEs. A content analysis of the 145 comment letters is conducted to identify the extent of the support for and the arguments against the new, stand-alone draft standard for audits of LCEs’ financial statements. In addition, this study considers how the comment letters describe the respondents’ views on audit quality in relation to the new standard. Finally, the tone of the comment letters and audit quality arguments is investigated.

The findings provide a useful framework of the most frequently used arguments supporting and opposing the ISA for LCEs. Within the themes identified, a wide variety of issues and concerns are discussed. The results reveal that the arguments in the comment letters are contradictory. For instance, when discussing audit quality, those interest groups that perceived many positive opportunities in the adoption of the ISA for LCEs thought that the audit quality would increase. Conversely, those interest groups that were skeptical about the success of the ISA for LCEs argued that the audit quality could be compromised by the general prejudice that the ISA for LCEs might be perceived as a lower-quality audit with fewer procedures.

This paper is, to the best of the authors’ knowledge, the first to examine the content of comment letters in the context of a new, stand-alone standard for audits of LCEs. The international audience can utilize the results in the context of the widely discussed issue of reducing LCEs’ auditing obligations. This study aims to contribute to the two streams of accounting literature concerning audit quality and political lobbying.

Islamic financial institutions (IFIs) are required to establish a Shariīʿah Governance Framework (SGF) to strengthen their Sharīʿah-compliance mechanism and ensure that all relevant IFI regulations are in line with Sharīʿah rules and principles. Effective implementation of the Shariīʿah-compliance function will further promote stakeholder confidence, as well as the integrity of IFIs, by reducing Shariīʿah non-compliance risks. This study aims to examine the internal control framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and explore the extent to which it can be incorporated in the Sharīʿah-compliance function of IFIs.

This study adopts a qualitative method of inquiry, utilizing the inductive method and content analysis to build comprehensive knowledge that will assist in exploring the framework of COSO methodology and the extent to which it can be adopted by IFIs.

The findings indicate that the existing frameworks of Sharīʿah governance, whether that of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) or Bank Negara Malaysia (BNM), need to be further developed. Therefore, the adoption of COSO methodology in the internal Sharīʿah audit of IFIs, as suggested by AAOIFI, is not only possible but desirable. The study also finds that the COSO framework places the highest priority on risk management in that it makes it an integral part of the decision-making process in all the institution's activities. As a result, incorporating the comprehensive COSO risk management structure within the Sharīʿah-compliance function will enhance risk management in IFIs.

This study highlights the importance of the COSO internal control framework and examines its components, principles and the possibility of its adoption by IFIs. The findings of this study are expected to contribute to enhancing the Sharīʿah-compliance function of IFIs.

The objective of this study is to present a theoretical framework, which helps ascertain the meanings of the Sharīʿah audit quality and identify the factors that affect it.

The current literature of conventional and Islamic finance on audit quality is critically reviewed to propose the theoretical framework for the quality of Sharīʿah audit.

The paper suggests that for a better Sharīʿah compliance at Islamic banking institutions (IBIs), the role of audit practitioners is very much indispensable. The competency of the practitioner is one of the important factors that affect the quality of the Sharīʿah audit. Assessment and identification of Sharīʿah risk in different financial arrangements, contracts and transactions require a unique competency on the part of the auditor, that is, gripping Sharīʿah law besides traditional assurance skills and techniques.

The Sharīʿah compliance is one of the primary objectives of IBIs, which works at the conceptual level, product development and implementation level, various business models and governance level. Sharīʿah audit function, internal or external, is an important component of Sharīʿah governance framework and provides an independent assessment of IBIs’ compliance with the Sharīʿah rules and principles and helps in managing the Sharīʿah non-compliance risk and ensuring sound internal Sharīʿah control system.

The paper proposes a theoretical framework for defining the Sharīʿah audit quality and determining the factors that are significant in affecting the Sharīʿah audit quality in the IBIs of Pakistan.

In this research, using an analytical framework on factors affecting the quality of auditing services, we consider factors that affect an expectations gap in providers and users of auditing services related to factors affecting auditing quality. Effective factors studied in this regard are professional features, including the professional role of individuals in the auditing process (auditors against preparers of financial statements), professional experience of individuals, professional rating and size of auditing firms. The first statistical society consists of certified public accountants (CPAs) working in the auditing organization and audit firms in Iran, and the second statistical society consists of all investment companies that operate under the supervision of the Tehran Stock Exchange Organization. Based on the results of the research, the role of professionals in the auditing process is not effective as an independent auditor or financial statements provider, as well as the professional experience of individuals in the expectations gap from factors affecting auditing quality, while the size and qualities of the auditing firms were influenced by the expectations gap of individuals in the field of auditing regulation.