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Research output (Journal article)

Christian Ott, Stephan Fuhrmann, Elisabeth Looks, Thomas Günther: The contents of assurance statements of sustainability reports and information asymmetry

Abstract

This paper investigates how the assurance of sustainability reports enhances the credibility of such reports in the eyes of the investors and, thus, results in lower information asymmetries, as measured by bid-ask spreads. We measure the assurance of sustainability reports based on a content analysis of the assurance statements in which the assurance providers describe the design of the assurance process. For a matched sample of 442 STOXX 600 Europe companies with and without assured sustainability reports, our results indicate that a high-quality design of the assurance process reduces the level of information asymmetry. While an assurance process substantiating a high assurance level decreases information asymmetries, an assurance process that ensures only a moderate assurance level is insufficient. If an assurance provider performs tests of details of numerical data, this further reduces information asymmetries. For countries without regulations on sustainability reporting, we provide evidence that analytical tests of aggregated indicators, the description of the assurance provider’s competencies and the description of the sustainability assurance-specific work steps also contribute to a reduction of information asymmetries.

Author Christian Ott, Stephan Fuhrmann, Elisabeth Looks, Thomas Günther
Title of the article The contents of assurance statements of sustainability reports and information asymmetry
Year 2017
Journal Accounting and Business Research
Issue / Number 47/4
Ranking B (VHB-Jourqual 2.1 (2011))
Pages 369-400

Affiliation

Division ("Fakultät") Wirtschaftswissenschaftliche Fakultät
Lehrstuhl Juniorprofessur für Betriebswirtschaftslehre, insbesondere Controlling und Management

Citation

Christian Ott, Stephan Fuhrmann, Elisabeth Looks, Thomas Günther: The contents of assurance statements of sustainability reports and information asymmetry. In: Accounting and Business Research 47/4, 2017, S. 369-400.