Implementing third-party assurance in integrated reporting: Companies’ motivation and auditors’ role

The purpose of this paper is to examine companies’ reasons for voluntarily obtaining third-party integrated reporting (IR) assurance and the role of external auditors in the assurance process.

By conducting 25 in-depth semi-structured interviews, a wide range of significant actors in the assurance process of integrated reports are addressed. In addition, archive materials are considered. The authors apply institutional theory, agency theory, and the diffusion of innovations theory to analyze IR assurance.

Companies follow coercive pressures by their stakeholders when obtaining external assurance. They intend to appreciate their non-financial indicators and increase their credibility and reliability. Auditors play an important role as change agents for the implementation of IR assurance by, e.g., supporting the correct interpretation of the International Integrated Reporting Council standards and by promoting IR.

First, 25 in-depth interviews can only give a first insight about the stated questions. Second, this paper only considers auditors and company representatives from Germany. Third, investors were not questioned about their attitude toward IR assurance.

The results may serve as a basis for the implementation of IR assurance.

This study combines the relatively unexplored research field of IR with three established theories. Hereby, it exposes companies’ motivation for obtaining external assurance and auditors’ role on the assurance process.