Determinants of external assurance on sustainability reports
Keywords
Loading...
Authors
Issue Date
2016-06-29
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
Companies are one of the most important causes of environmental pollution and social injustice. Stakeholders demand that companies become more accountable. Therefore, companies increasingly issue sustainability reports. But there is an agency problem, leading to credibility issues. External assurance can enhance the credibility of sustainability reports. But there is another agency problem regarding external assurance. There is a large variety of external assurance on sustainability reports, which this thesis aims to explain. The question is whether external assurance is used as a signal and reduces the agency problem, or as a mean to gain organisational legitimacy. A total sample of 4,686 observations from 21 countries was comprised covering a six year period. The results show that companies with relatively good environmental and social performance are more likely to adopt external assurance and choose a more comprehensive assurance scope. Furthermore bigger companies, companies active in sensitive industries, companies domiciled in stakeholder oriented countries, and companies domiciled in countries with weak legal enforcement are more likely to adopt external assurance. The results suggest that the adoption of external assurance reduces the agency problem. It implies that more regulation with mandated external assurance will help make companies more accountable.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen