The assurance providers’ role in improving the independent assurance statement quality on sustainability reporting
ISSN: 1030-9616
Article publication date: 19 January 2023
Issue publication date: 2 February 2023
Abstract
Purpose
This study aims to investigate the effect of assurance provider types on the independent assurance statement quality of Asian companies' sustainability report (SR) and examine environmental risk’s role as a moderating variable.
Design/methodology/approach
This study analyzes large Asian companies' stand-alone SR using moderated regression analysis to test hypotheses. Textual analysis is conducted to identify environmental risk disclosures.
Findings
This study shows that accounting assurance providers affect independent assurance statement quality in terms of compliance with assurance statement elements, while nonaccounting assurance providers can better accommodate environmental risk information required by the intended users.
Research limitations/implications
This study has several limitations. The research focuses on assurance statements and stand-alone SR of large companies in Asia; therefore, future research could examine similar analyses using integrated reports from Asia to investigate whether the results will differ. Additionally, this study does not divide assurance providers into Big-N and non-Big-N; thereby, it can be extended in future research.
Practical implications
Assurance providers need to consider environmental risk as a critical issue for the intended users to issue a high-quality independent assurance statement.
Social implications
Assurance statements issued by assurance providers increase public confidence in the reliability of the information contained in the SR. Therefore, regulators are expected to immediately set mandatory standards for sustainability assurance practices.
Originality/value
This study proves that accounting assurance providers can improve assurance statement quality. The variable environmental risk is also proven to be a pure moderator in negatively interacting the effect of assurance provider types on independent assurance statement quality.
Keywords
Acknowledgements
Declaration of Absence of Conflicts of Interest: This paper also describes our original work and is not under consideration by any other journal. All authors approved the manuscript and this submission. All authors do not have any conflicts of interest regarding this manuscript. This document was reported as the result of the research the authors conducted as one of the requirements of their responsibility as researchers at our university.
The author would like to thank all authors whose papers are cited in this paper as a valuable reference and resource for this paper. Lastly, thanks to the management of the Accounting Research Journal, who helped to review, make suggestions and also publish this article.
Citation
Harindahyani, S. and Agustia, D. (2023), "The assurance providers’ role in improving the independent assurance statement quality on sustainability reporting", Accounting Research Journal, Vol. 36 No. 1, pp. 37-54. https://doi.org/10.1108/ARJ-01-2021-0024
Publisher
:Emerald Publishing Limited
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