Corporate Social Performance, Corporate Financial Performance and CSR assurance – an international examination

Abstract

This study aims to give an understanding of the moderating role of CSR assurance (CSRA) on the relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP). Since prior research mainly focused on US samples and market-based measures for CFP, this study investigates an international sample of firms and uses two accounting-based measures of CFP, namely ROA and ROE. By using a sample of 8760 firm-year observations of 56 countries between 2015 and 2019, several statistical analyses are performed. The results indicate that there is a positive relationship between CSP and CFP, but that CSRA does not influence this relationship. Moreover, it does not matter whether this assurance is coming from a non-Big 4 firm or a Big 4 firm. A robustness check with a market-based measure indicates that assurance from a Big 4 firm would harm the relationship. Moreover, when the sample is divided in stakeholder- and shareholder-oriented countries, there is a small positive effect found of non-Big 4 assurance on the CSP – CFP relationship. This study gives an inside to managers who want to obtain CSR assurance and to researchers who want to gain deeper insights in the CSP – CFP relationship and the effect of CSR assurance.