External assurance of non-financial information: a false sense of legitimacy?
Keywords
Loading...
Authors
Issue Date
2024-07-08
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
This study investigates the impact of managerial capture on the external assurance process of non-financial information within large and listed Dutch companies. The research aims to understand how managerial preferences and expectations shape decisions made by assurers regarding the scope and level of assurance provided. Employing a qualitative research design, data were gathered through nine semi-structured interviews with assurers, specifically accountants, engaged in the voluntary assurance of non-financial information and preparing for forthcoming mandated assurance under the CSRD. Additionally, a document analysis of annual reports spanning five years from 75 listed companies was conducted to complement insights from the interviews. Data analysis employed primarily a top-down approach. The findings indicate that the external assurance process is significantly influenced during scoping, particularly by defining KPIs and selecting favorable benchmarks. Assurers mitigate these influences through adherence to stringent independence regulations, exemplifying safeguards within the profession. A notable observation is the perceived limited understanding of stakeholders of the distinction between reasonable assurance and limited assurance, suggesting potential for managerial influence by framing limited assurance as more robust than it actually is. The implications of these findings are discussed within the framework of legitimacy theory. This study enhances understanding of how managerial capture shapes the external assurance of non-financial information. Future research could explore concurrent perspectives of assurers and other stakeholders or focus on IASPs perspectives.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen