The Relative Role of Firm Incentives, Auditor Specialization, and Country Factors as Antecedents of Non-financial Audit Quality

What is it about?

Companies increasingly demand independent verification of their Corporate Social Responsibility (CSR) reports. This novel form of auditing services differ from the typical assurance engagements provided to financial statements. The presence of various types of third-party assurance providers, in combination with different auditing standards applicable to non-financial information, make the sustainability assurance (SA) market unique. In this study, we focus on the SA statements that accompany a CSR report. Our objective is to examine the content of these statements and explain their variation across a sample of the largest companies in the world. We content analyzed more than 1,200 SA statements during the period 2005-2013 and determined for each statement its level of quality depending on the adherence to well-known SA standards. Our study has practical implications for managers interested to benchmark the quality of SA statements among large firms in several countries.

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