Determinants of voluntary assurance on sustainability reports: an empirical analysis

Ruhnke, Klaus; Gabriel, Alexander

doi:10.1007/s11573-013-0686-0

Cited by 97 publications

(108 citation statements)

References 51 publications

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“…Their study does not consider the association between audit committees and SRA. This is also the case with Ruhnke and Gabriel (). Their investigation of the largest companies from the UK, Germany and Netherlands does not extend to considering the effect of corporate governance on sustainability reporting.…”

Section: Prior Literature and Hypothesis Developmentsupporting

confidence: 68%

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Credibility of sustainability reports: The contribution of audit committees

2018

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Concerns about the credibility of sustainability reports can be mitigated through assurance. Although audit committee remit encompasses monitoring of sustainability issues, there are potential complementary and substitution issues between governance mechanisms. This paper explores the relationship between audit committees and sustainability reporting assurance using resource dependency theory. We find audit committee characteristics have an impact, additional to that of the board of directors and the existence of sustainability committees, on voluntary sustainability assurance. Our results also show that audit committee independence is associated with use of a Big Four audit firm for sustainability assurance. A negative association between sustainability committees and assurance, however, indicates assurance could be a burden for small firms. Overall, the findings suggest audit committees add credibility and help improve sustainability reporting through their independence, expertise and oversight.

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Section: Prior Literature and Hypothesis Developmentsupporting

confidence: 68%

“…Their study does not consider the association between audit committees and SRA. This is also the case with Ruhnke and Gabriel (2013).…”

Section: Credibility Of Sustainability Reportssupporting

confidence: 52%

Credibility of sustainability reports: The contribution of audit committees

2018

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“…While the latter contradicts with the argument that assurance can perform a substitute function for the lack of institutional establishments (Durnev and Kim 2005;Choi and Wong 2007), it is consistent with a counter argument that perceived poor credibility of assurance services in weak legal regimes can also prevent firms as well as stakeholders from achieving optimum benefits from them (Ball 2001). Ruhnke and Gabriel (2013) analyze assurance practices of firms in Germany, the Netherlands, and the UK. They fail to identify country effect, while demonstrate significant impact of agency costs on the demand for voluntary assurance.…”

Section: Prior Research On Voluntary Csr Assurancementioning

confidence: 89%

Enhancing the Role and Effectiveness of Corporate Social Responsibility (CSR) Reports: The Missing Element of Content Verification and Integrity Assurance

2015

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Corporate Social Responsibility (CSR) reporting by large corporations has witnessed phenomenal growth over the last two decades. The voluntary nature of these disclosures, however, has led to inconsistencies in reporting formats, treatment, and inclusion of various contextual elements, and a lack of robust measures pertaining to the quality and accuracy of the reports' content. Efforts to address these drawbacks such as Global Reporting Initiative and ISO 26000 have proven unsatisfactory due to their primary emphasis on process for creating CSR reports without similar attention on measurement criteria to ensure robust implementation, or verify accuracy of information. This paper attempts to fill this gap in the literature. It uses a new framework-called the CSR-Sustainability Monitor Ò -of analyzing and evaluating the contents of CSR reports in a manner that allows for a single report to be compared with any other single group, and groups of reports based on industry, country-oforigin, and similar other groupings. Using data from the CSR reports of 614 large corporations worldwide, this study analyzes the character and scope of integrity assurance contained in these CSR reports. The analysis is further extended to explore some external factors that would explain variations in the assurance decision and the quality of integrity assurance in these reports.

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“…Prior literature argues that SRA is a function of industry and firm-related factors (see Simnett et al 2009;Ruhnke and Gabriel 2013). Moreover, there has been an increasing recognition of the role of corporate governance mechanisms including board of directors and sustainability committees in monitoring sustainability performance and reporting (Post et al 2011;Zhang et al 2013;Peters and Romi 2014;Trotman and Trotman 2015).…”

mentioning

confidence: 99%

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

2017

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Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011-2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation contracts. However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management's behaviour and be concerned about the achievement of sustainability goals.

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Determinants of voluntary assurance on sustainability reports: an empirical analysis

Cited by 97 publications

References 51 publications

Credibility of sustainability reports: The contribution of audit committees

Credibility of sustainability reports: The contribution of audit committees

Enhancing the Role and Effectiveness of Corporate Social Responsibility (CSR) Reports: The Missing Element of Content Verification and Integrity Assurance

CEO Compensation and Sustainability Reporting Assurance: Evidence from the UK

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