ANALYSIS OF THE QUALITY OF ISAE 3000 ASSURANCE STATEMENTS ON CORPORATE SUSTAINABILITY REPORTS ACROSS STOCK EXCHANGES IN SEVERAL COUNTRIES: A 2020-2022 STUDY

Gavriel Faith Nangoy; Carmel Meiden; Suheriyatmono

doi:10.53625/ijss.v3i5.7426

Authors

Gavriel Faith Nangoy Institut Bisnis dan Informatika Kwik Kian Gie Jakarta
Carmel Meiden Institut Bisnis dan Informatika Kwik Kian Gie Jakarta
Suheriyatmono Institut Maritim Prasetiya Mandiri Lampung

DOI:

https://doi.org/10.53625/ijss.v3i5.7426

Keywords:

Assurance Statement Content Analysis ISAE 3000 Scoring Quality

Abstract

While sustainability reporting has made significant strides in recent years, a noticeable gap persists between reporting practices and corresponding assurance measures. This paper emphasizes the alignment of sustainability assurance statements with the essential elements mandated by the ISAE 3000 assurance standard. A content analysis was conducted on the assurance statements of twenty (20) publicly listed companies across 20 different exchanges over a three-year span from 2020 to 2022. The analysis employed a quantitative approach, utilizing scoring to assess the alignment of the content with the requirements of the assurance standard. The research instrument was based on the minimal content elements of ISAE 3000 and developed by previous studies. The study reveals high quality levels among all assurance providers in the sample. Country-wise, the quality level is high for all countries except Japan, Thailand, Denmark, and Australia, which exhibit a medium quality level. Similarly, sectors in the sample generally exhibit a high quality level, except for consumer goods and industrial sectors, which demonstrate a medium quality level. The study also identifies variability in the content elements of assurance statements.

References

Y. Guo and D. C. Yang, “Sustainability Accounting Reporting: A Survey on 30 U.S. Dow-Jones Companies,” Int. J. Account. Tax., vol. 2, no. 3, pp. 1–15, 2014, doi: 10.15640/ijat.v2n3a1.

C. Meiden, “Exploring the Measurement of Environmental Performance in Alignment with Environmental , Social , and Governance ( ESG ): A Qualitative Study Exploring the Measurement of Environmental Performance in Alignment with Environmental , Social , and Governance ( ESG ): A Qualitative Study,” vol. 12, no. 9, 2023.

A. Pacific, “State of sustainability reporting in Asia Pacific,” no. June, 2023.

B. O’Dwyer and D. L. Owen, “Assurance statement practice in environmental, social and sustainability reporting: A critical evaluation,” Br. Account. Rev., vol. 37, no. 2, pp. 205–229, 2005, doi: 10.1016/j.bar.2005.01.005.

A. Ball, D. L. Owen, and R. Gray, “External transparency or internal capture? The role of third‐party statements in adding value to corporate environmental reports1,” Bus. Strateg. Environ., vol. 9, no. 1, pp. 1–23, 2000, doi: doi.org/10.1002/(SICI)1099-0836(200001/02)9:1<1::AID-BSE227>3.0.CO;2-H.

P. Perego and A. Kolk, “Multinational Accountability on Sustainability : The Evolution of Third - Party Assurance of Sustainability Reports,” 2012.

P. Perego, “Causes and Consequences of Choosing Different Assurance Providers : An International Study of Sustainability Reporting,” vol. 26, no. 3, 2009.

M. Alonso-almeida, J. Llach, and F. Marimon, “A Closer Look at the Global Reporting Initiative Sustainability Reporting as a Tool to Implement Environmental and Social Policies: A Worldwide Sector Analysis,” Corp. Soc. Responsib. Environ. Manag., vol. 21, pp. 318–335, 2014, doi: 10.1002/csr.1318.

L. Simoni, L. Bini, and M. Bellucci, “E ff ects of social , environmental , and institutional factors on sustainability report assurance : evidence from European countries,” vol. 28, no. 6, pp. 1059–1087, 2020, doi: 10.1108/MEDAR-03-2019-0462.

T. Janggu et al., “Assurance of CSR and Sustainability Reports : Empirical Evidence from an Emerging Economy,” vol. 3, no. 11, pp. 390–397, 2013.

C. Daub, “Assessing the Quality of Sustainability Reporting : An Alternative Methodological Approach,” J. Clean. Prod., vol. 15, no. 1, pp. 75–85, 2007, doi: doi.org/10.1016/j.jclepro.2005.08.013.

A. Ardi and C. Meiden, “Kualitas Assurance Statement Atas Sustainability Reports,” J. Akunt., vol. 12, no. 1, 2023, doi: doi.org/10.46806/ja.v12i1.1028.

W. R. Scott, Financial Accounting Theory, 8th editio. North York: Pearson Canada Inc., 26 Prince Andrew Place, North York, Ontario, 2020.

K. M. Eisenhardt, S. The, M. Review, and N. Jan, “Agency Theory : An Assessment and Review Linked references are available on JSTOR for this article : Agency Theory : An Assessment and Review,” vol. 14, no. 1, pp. 57–74, 1989.

M. C. Jensen and W. H. Meckling, “Theory of The Firm: Managerial Behavior, Agency Costs and Ownership Structure,” J. financ. econ., 1976, doi: 10.1177/0018726718812602.

R. E. Freeman and L. R. David, “Stockholders and Stakeholders: A New Perspective on Corporate Governance,” Calif. Manage. Rev., vol. 25, no. 3, pp. 88–106, 1983, doi: 10.2307/41165018.

A. A. Ullmann, “Social Reporting,” vol. 4, no. l, pp. 123–133, 1979.

J. Guthrie and L. Ward, “Legitimacy Theory: A Story of Reporting Social and Environmental Matters Within The Australian Food and Beverage Industry,” Asian Pacific Interdiscip. Res. Account. Conf., pp. 1–35, 2007.

C. D. Liggio, “The Expectation Gap: The Accountants Legal Waterloo,” J. Contemp. Bus., vol. 3 (3), pp. 27–44, 1974.

C. Cohen, “The Cohen Commission,” 1978, no. 202.

B. Porter, “An Empirical Study of the Audit Expectation-Performance Gap,” Account. Bus. Res., vol. 24, pp. 49–68, 1993, doi: 10.1080/00014788.1993.9729463.

A. G. Deepal, “Audit expectation gap : a comprehensive literature review,” vol. 7, no. 3, pp. 308–319, 2022, doi: 10.1108/AJAR-10-2021-0202.

GRI, GRI 1: Foundation 2021, no. October. 2021.

ICMM, “ICMM Revised January 2021,” no. January, 2021.

IFAC, IAASB Handbook 2010. 2010.

ISAE3000, International Standard on Assurance Engagements. 2013. doi: 10.5117/mab.75.15685.

K. Krippendorff, Content Analysis An Introduction to Its Methodology Fourth Edition Content Analysis. 2019.

U. Sekaran and R. Bougie, Research Methods for Business: A Skill-Building Approach, Seventh Ed. John Wiley & Sons, 2016.

J. Raar, “Environmental initiatives: Towards triple-bottom line reporting,” Corp. Commun. An Int. J., vol. 7, no. 3, pp. 169–183, 2002, doi: 10.1108/13563280210436781.

FEE, “Fédération des Experts Comptables Européens,” no. April, 2002.