Corporate Social Responsibility Assurance and Analyst Forecast Accuracy
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2022-07-13
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en
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Abstract
Companies increasingly have their Corporate Social Responsibility (CSR) reports assured in response to stakeholders questioning the credibility of their reports. Current CSR assurance (CSRA) practices lack strict regulations and a company’s management has to choose between different types of CSRA. This study aims to understand the effect of CSRA on the credibility of CSR reports, by investigating the effect of CSRA, and different types of CSRA, on analyst forecast accuracy. Using a sample of 487 listed European companies for the period of 2013-2017, the results show that CSRA is positively related to analyst forecast accuracy for companies that operate in an environmentally or socially sensitive industry. The results also provide evidence that CSRA performed with a broad scope is positively related to analyst forecast accuracy. Additionally, results show that CSRA provided by an accounting firm and with a reasonable level are more likely to be positively related to analyst forecast accuracy for companies with a superior Corporate Social Performance (CSP) than for companies with an inferior CSP. The type of CSRA standards does not affect analyst forecast accuracy. This study emphasizes the need for stricter regulations of CSRA practices, in order to increase the quality of CSRA practices.
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Faculteit der Managementwetenschappen