J Bus Ethics (2019) 154:733–757
https://doi.org/10.1007/s10551-016-3410-5
ORIGINAL PAPER
The Role of Sustainability Performance and Accounting Assurors
in Sustainability Assurance Engagements
Katrin Hummel1 • Christian Schlick2 • Matthias Fifka3
Received: 2 June 2016 / Accepted: 3 December 2016 / Published online: 6 January 2017
 Springer Science+Business Media Dordrecht 2017
Abstract Research on sustainability assurance is still in its
beginnings. One of the key questions in this field that also
is of the highest practical relevance is concerned with the
quality of the assurance process. However, a common
understanding of assurance quality and how it should be
measured is still missing. We try to close this gap by
building on the financial audit literature. We introduce a
definition of assurance quality that comprises two key
aspects: the depth of the assurance process and the breadth
of the assurance statement. Based on prior research, we
hypothesize that a firm’s sustainability performance is
related to the depth of the assurance process, while the type
of the assurance provider, more precisely the affiliation to
the accounting profession, is related to the breadth of the
assurance statement. Results for a sample of 122 European
firms reveal a negative relationship between sustainability
performance and assurance process depth as well as
between the affiliation to the accounting profession and
assurance statement breadth. Thus, we find evidence that
poor sustainability performers ask for in-depth assurance
services, most likely as a means to enhance their internal
& Matthias Fifka
matthias.fifka@fau.de
Katrin Hummel
katrin.hummel@business.uzh.ch
Christian Schlick
christian.schlick@glemco.de
1
Department of Business Administration, University of
Zurich, Affolternstrasse 56, 8050 Zurich, Switzerland
2
Glemco GmbH, Kammergasse 9a, 85354 Freising, Germany
3 Cohen and Simnett (2015, p. 68) note that ‘‘there are many
Institute of Economics, Friedrich-Alexander University
Erlangen-Nuernberg, Kochstrasse 4 (17), 91054 Erlangen,
Germany
sustainability-related processes and systems. Assurance
providers that do not belong to the accounting profession in
turn are associated with broader assurance statements.
Keywords Sustainability assurance  Sustainability
reporting  Assurance quality  Content analysis 
Sustainability performance  Accounting assuror
Introduction
In the past two decades, sustainability reporting has con-
stantly increased and is now a common business practice
with 92% of the largest 250 companies worldwide pub-
lishing stand-alone or integrated sustainability reports in
2015 (KPMG 2015, p. 22). Likewise, the proportion of
firms that seek external assurance of these reports has
grown from 29% in 2002 to 63% in 2015 among the largest
250 companies worldwide (KPMG 2015). The question
arises why companies undertake increasing efforts to have
their reports assured, although a financial burden is inevi-
tably connected to it. Potential explanations could be pro-
vided by legitimacy and signaling theory, since companies
are likely to strive for more legitimacy by signaling to their
stakeholders that they can trust the content disclosed in
their reports because it has been attested by a third party.
This theoretical explanation is supported by the fact that
assurance is voluntary. The voluntary character, however,
raises questions on the quality of the assurance, as com-
panies might seek to keep costs for it low and still be able
to signal that assurance has taken place. Accordingly,
research opportunities as we try to assess the quality of
CSR report assurance engagements.’’
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For instance, researchers have not yet agreed on a
common definition, let alone measurement approach of
assurance quality. Moreover, prior research has shown that
firm characteristics are related to the adoption of sustain-
ability assurance (Simnett et al. 2009; Kolk and Perego
2010; Cho et al. 2014; Casey and Grenier 2015), and
provider characteristics are related to the content of
assurance statements (e.g., O’Dwyer and Owen 2005;
Manetti and Toccafondi 2012). Thus, there are strong
indications that the client firm and the assurance provider
jointly determine the terms of the assurance engagement in
its entirety. Therefore, it is necessary to investigate the role
of firm and provider characteristics at the same time to
come to conclusions on their impact. Results from this
investigation can also enlighten the on-going discussion in
the literature on the existence of managerial capture in
sustainability assurance engagements. Some researchers
argue that sustainability assurance is ‘‘captured’’ by the
management to ‘‘advance the corporate image’’ at the
expense of transparency and accountability (Owen et al.
2000; O’Dwyer and Owen 2005). Such capture has severe
ethical implications because it would contradict the ethical
standards to which professional accounts are bound when
providing assurance based on the International Standard on
Assurance Engagements 3000 (ISAE 3000). Assurance
providers in this case must also comply with the IESBA
Code of Ethics for Professional Accountants, which
demands professional competence, independence, and
objectivity to ensure assurance quality. In the case of
managerial capture, assuror independence would have to be
questioned in particular.
Moreover, accountants are not only held to ethical
conduct, they also evaluate the ethical performance of the
companies they audit. It is commonly agreed that aside
from social and environmental aspects, ethics is another
vital dimension of sustainability assurance. In theory, this
would mean that assurance could lead to a better ethical
performance of companies, but such assumption does
heavily depend on the motivation of the company that
seeks assurance and the way in which the assurance pro-
cess is conducted. Inevitably linked to this is the question
how well ethical performance can actually be measured
because ‘‘it is impractical to actually observe unethical
behavior for research purposes’’ (Oz 2001, p. 138). Due to
this difficulty, assurance could be regarded as ineffective in
terms of ethical behavior.
Against this background of the current state of research,
we investigate the relationship between firm and provider
characteristics and assurance quality empirically. For this
purpose, we draw on the financial audit literature (DeAn-
gelo 1981) to provide a definition of assurance quality.
Assurance quality is defined as the joint probability that the
assuror will discover and report problematic issues in the
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client’s sustainability reporting system. To comprise these
two aspects of assurance quality—discovering and report-
ing—we investigate the depth of the assurance process and
the breadth of the assurance statement. We concentrate on
a firm’s sustainability performance and the affiliation to the
accounting profession as main firm and provider charac-
teristics that are related to assurance quality. While there is
only scarce research on the role of sustainability perfor-
mance in assurance engagements, the literature on sus-
tainability disclosure provides extensive evidence for the
important role that sustainability performance plays in
shaping sustainability disclosure (Cho and Patten 2007;
Clarkson et al. 2008). Due to this gap, Kolk and Perego
(2010, p. 195) call for more empirical research on the
‘‘diffusion of assurance services in relation to a firm’s
social and environmental performance.’’ According to our
research, there is currently only one study (Casey and
Grenier 2015) that investigates the role of sustainability
performance for the adoption of external assurance. The
results reveal a positive relationship between sustainability
concerns—indicating a firm’s weaknesses in sustainabil-
ity—and assurance adoption. Two explanations are possi-
ble: firms with sustainability concerns may ask for external
assurance to improve on these concerns or for impression
management purposes. To further disentangle these two
explanations, we investigate the relationship between sus-
tainability performance and assurance quality. More pre-
cisely, we concentrate on assurance process depth rather
than assurance statement breadth, since firms can particu-
larly influence the depth of the assurance processes during
their negotiations on the terms of the assurance.
In order to examine the influence of firm and assurance
provider characteristics, we investigate a sample of 122
European firms that obtain external assurance. Besides
firm’s sustainability performance and affiliation to the
accounting profession, we control for a number of addi-
tional variables that previous research has identified to
determine assurance adoption and assurance quality,
respectively (Simnett et al. 2009; Kolk and Perego 2010;
Zorio et al. 2013; Cho et al. 2014; Casey and Grenier
2015). Our analysis is based on multivariate regression
analyses, and we perform additional statistical checks on
the robustness of our findings.
In so doing, we contribute to the literature in several
ways. First, prior content-based studies on assurance
statements investigated and discussed the content and dis-
closure of each assurance statement element separately, but
lack an aggregate measure of assurance quality. We pro-
vide a definition of assurance quality along with mea-
surement approaches for assurance process depth and
assurance statement breadth, which other researchers could
use to determine content-based assurance quality. This
measurement approach is central to our paper, as it
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance…
addresses the prevailing difficulty to assess the determi-
nation of assurance quality. Second, there is currently no
study that investigates the relationship between sustain-
ability performance and assurance quality, although liter-
ature on sustainability disclosure has demonstrated the
importance of this variable. This lack of research might be
attributable to the general difficulty of measuring sustain-
ability performance. Thus, we rely on an innovative mea-
surement concept that has been recently introduced by
Hummel and Schlick (2016). Third, in the absence of
legally binding regulations on the assurance process,
results from our study enlighten the discussion on the
existence of managerial capture in the literature which has
also ethical implications. In particular, our results reveal
that poor sustainability performers ask for in-depth assur-
ance services, probably as a means to enhance their internal
sustainability-related systems and process. This finding
does not support the previously critical notion of man-
agerial capture. On the other hand, our results show that
accounting assurance providers are associated with lower
assurance statement breadth although they are more likely
to apply assurance standards. This finding may be partially
related to the use of the ISAE 3000, which has not been
specifically designed for the sustainability context. Besides
the use of more specific assurance standards, implicit eth-
ical and moral standards might also be an effective way to
ensure high assurance quality.
In order to pursue our objectives, we proceed as follows.
In the next section, we develop the hypotheses necessary
for our empirical investigation based on existing literature
and a definition of assurance quality. The subsequent sec-
tion outlines our research design. In particular, the data
sample and empirical model are presented and the variables
are introduced. In section four, descriptive statistics are
presented and our empirical findings are discussed. We
conclude by drawing practical and theoretical implications
and make recommendations for future research.
Literature Review and Hypotheses Development
Literature Review
Research on sustainability assurance includes three pri-
mary areas of interest.1 Studies on the adoption of assur-
ance predominantly focus on firm-, industry-, and country-
specific determinants (Simnett et al. 2009; Kolk and Perego
2010; Cho et al. 2014; Casey and Grenier 2015). We draw
1 quality’’ in general and accounts not only for the dis-
Moreover, experimental studies have examined report users’
perceptions of the reliability of sustainability disclosure and assurance
(Hodge et al. 2009; Pflugrath et al. 2011).
735
on results from these studies to identify firm characteristics
that may be related to assurance quality.
The second group of studies investigates assurance
statements in detail (Ball et al. 2000; Owen et al. 2000;
O’Dwyer and Owen 2005; Deegan et al. 2006; Cooper and
Owen 2007; Mock et al. 2007; Manetti and Becatti 2009;
Manetti and Toccafondi 2012; Perego and Kolk 2012;
Zorio et al. 2013). These studies are among the first to
investigate the phenomenon of sustainability assurance
more thoroughly and mainly provide a descriptive over-
view of the content and disclosure of certain assurance
statement elements (Ball et al. 2000; O’Dwyer and Owen
2005). Some of these studies derive a very critical picture
of assurance engagements highlighting the existence of
managerial capture as a ‘‘concept that sees management
take control of the whole process […] by strategically
collecting and disseminating only the information it deems
appropriate to advance the corporate image, rather than
being truly transparent and accountable to the society it
serves’’ (Owen et al. 2000, p. 85). This would render
assurance under managerial capture to be highly unethical,
because it may lead to a heavily distorted perception of the
company in question.
Other studies include more complex investigations of
associations between the content and disclosure of
assurance statement elements and firm or provider char-
acteristics. For instance, Deegan et al. (2006) split up the
results on assurance statement elements by country and
type of assurance provider. Mock et al. (2007) conduct a
logistic regression of the type of assurance provider on
various assurance statement elements. While these studies
have substantially improved our understanding of sus-
tainability assurance statements, it is difficult to draw
conclusions on the factors that are most closely related to
sustainability assurance statements due to the descriptive
nature of most studies and omitted variable bias. More-
over, they investigate the content and disclosure of each
assurance statement element separately, which provides
insights into the dissemination of each assurance state-
ment element but at the same time hampers the use of
multivariate statistical analyses. Only Zorio et al. (2013)
and Perego and Kolk (2012) base their analyses on an
overall measure of assurance (statement) quality, which is
calculated as the sum of the coding of various assurance
statement elements. Our study draws from these two
studies. While the measure provided by Zorio et al.
(2013) refers to the ‘‘quality of the assurance report’’ and
is based on an assessment of the disclosure versus non-
disclosure of assurance statement elements, the measure
provided by Perego and Kolk (2012) refers to ‘‘assurance
closure but also partly for the content of assurance
statement elements. We argue that this distinction is
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important as only the latter allows conclusions that go
beyond the assurance statement and include the assurance
process. We come back to this important distinction in
the next section, when we define assurance quality and
introduce our measures.
Apart from that, both measures facilitate the compar-
ison of assurance (statement) quality on an aggregated
level (e.g., countries, industries, assurance providers) and
the use of multivariate analyses, which are appropriate to
overcome the problem of omitted variable bias. Perego
and Kolk (2012), for instance, show that assurance quality
on average is highest among firms in Belgium and Swe-
den and that accountant assurors provide slightly higher
assurance quality than certification bodies and specialists.
To the best of our knowledge, only Zorio et al. (2013) run
multivariate regression analyses to investigate the rela-
tionship between firm and provider characteristics and
assurance statement quality. Results from their analyses
reveal that audit firms (compared to consultants) provide
higher assurance statement quality and that size is posi-
tively and leverage is negatively related to assurance
statement quality.
This development towards more complex models to
explain assurance (statement) quality is also reflected in
an increase in qualitative studies that examine the
demand and the supply side of sustainability assurance
more thoroughly (Park and Brorson 2005; O’Dwyer
2011; O’Dwyer et al. 2011). This third group of studies
provides more detailed insights into the process of
assurance engagements based on qualitative methods
such as interviews and case studies. Results from these
studies reveal that assurance providers exhibit a strong
commitment to accountability towards external stake-
holders (O’Dwyer 2011; O’Dwyer et al. 2011). Some of
these studies also examine companies’ motives for sus-
tainability assurance (Park and Brorson 2005; Simnett
et al. 2009; Edgley et al. 2010), identifying enhanced
credibility, refined internal systems or processes, and
improved sustainability performance as primary reasons
for adopting assurance. Similar reasons are mentioned by
Huggins et al. (2011). By contrast, companies may avoid
adopting assurance because of the additional costs, the
lack of perceived value added, and a lack of stakeholder
demand (Park and Brorson 2005). Taken together, results
from these studies emphasize that both the supply side—
i.e., the assurance provider—and the demand side of
assurance engagement—i.e., the client firm—need to be
accounted for when analyzing sustainability assurance
quality. The rather abstract concept of assurance quality
can be expressed through the two components of
assurance process depth and assurance statement breadth
which are described in more detail in the next section.
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K. Hummel et al.
Assurance Process Depth and Assurance Statement
Breadth
Assurance engagements are defined by the International
Auditing and Assurance Standards Board (International
Auditing and Assurance Standard Board (IAASB) 2013,
p. 7) as engagements ‘‘[…] in which a practitioner aims to
obtain sufficient appropriate evidence in order to express a
conclusion designed to enhance the degree of confidence of
the intended users other than the responsible party about the
subject matter information (that is, the outcome of the
measurement of evaluation of an underlying subject matter
against criteria).’’ Since research on sustainability assurance
is still in its beginnings, a common understanding, let alone a
definition, of assurance quality is still missing. Accordingly,
in a recent proposal for future research on sustainability
assurance Cohen and Simnett (2015, p. 68) note that ‘‘there
are many research opportunities as we try to assess the
quality of CSR report assurance engagements.’’ Following
the financial accounting literature (DeAngelo 1981), we
define assurance quality as the joint probability that the
assuror will discover and report problematic issues in the
client’s sustainability reporting system. These two aspects
of assurance quality—discovering and reporting—are
reflected in the depth of the assurance process—referring to
the discovering of issues—and the breadth of the assurance
statement—referring to the reporting of issues. We derive
both variables based on content analysis of the publicly
disclosed assurance statements.
Assurance process depth is defined as the intensity of
the assurance process. A more intensive assurance process
is more likely to reveal problematic issues. We rely on
insights from prior research (Park and Brorson 2005;
Edgley et al. 2010; O’Dwyer et al. 2011) to identify those
assurance statement elements that describe the intensity
and scope of the assurance process. We measure assurance
process depth based on the content of these elements. Since
more intensive assurance services are associated with
higher costs, these elements are typically negotiated
between the client who bears the extra costs and the
assurance provider. For instance, Park and Brorson (2005,
p. 1101) report: ‘‘The assurance provider and the reporting
organization agree on the scope of the assurance, the cri-
teria for the assessment, number of site visits and other
practical details.’’ Assurance process depth captures the
scope of the assurance, the extent to which key sustain-
ability-related performance indicators are covered by the
assurance, the level of the assurance, the variety of the
applied methods, whether the materiality of the report is
assessed, and whether recommendations are provided.
Assurance statement breadth, on the other hand, is
defined as the extent of the assurance statement based on a
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance…
minimum list of assurance statement elements. A more
comprehensive assurance statement—reflected by assur-
ance statement breadth—enables the reader to better assess
the assurance process and the results of the assurance. We
rely on the two most important assurance standards,
namely the ISAE 3000 and the AccountAbility 1000
Assurance Standard (AA1000AS), and the Global Report-
ing Initiative (GRI) recommendations as well as prior
research on assurance statements (Ball et al. 2000; Owen
et al. 2000; O’Dwyer and Owen 2005; Deegan et al. 2006;
Cooper and Owen 2007; Mock et al. 2007; Manetti and
Becatti 2009; Manetti and Toccafondi 2012; Perego and
Kolk 2012; Zorio et al. 2013) to determine the breadth of
the assurance statement. It is measured based on the dis-
closure versus non-disclosure of a list of assurance state-
ment elements. Thus, we follow Zorio et al. (2013) by
assessing the disclosure of certain assurance statement
elements in the assurance statement. The measurements of
both assurance process depth and assurance statement
breadth are further elaborated in the research design
section.
Theoretical Background and Hypotheses
From a theoretical perspective, multiple theoretical
approaches have been employed for the research on sus-
tainability assurance (Cohen and Simnett 2015). In par-
ticular, legitimacy theory and stakeholder theory contribute
to the understanding of previous findings on the adoption,
outcome, and process of sustainability assurance engage-
ments (Darnall et al. 2009; O’Dwyer et al. 2011). As
indicated by the term assurance itself, companies try to
assure the readers of their reports, who in turn are stake-
holders of various kinds, that the contents disclosed are true
and have been verified by a third party. This verified dis-
closure seeks to obtain the stakeholders’ appreciation of the
company’s transparency efforts and thus maintain or
increase its legitimacy (Weaver et al. 1999).
The key mechanism in this process is signaling. Sig-
naling theory (Spence 1973, 2002) implies that sustain-
ability reporting serves as a signal to the stakeholders about
the company’s behavior and performance and attempts to
convince readers of its social responsibility (Elitzur and
Gavious 2003; Jain 2016). The question of credibility is
crucial in this regard, as the reader has no possibility—
unless the report has been examined by non-governmental
organizations or journalists—to judge if the contents dis-
closed are actually true. Therefore, assurance itself serves
as a signal easily to detect by the reader to convey the
company’s truthfulness.
However, the possibility to signal comes at a certain
cost, as the assurance provider, who is elementary in the
process, charges a considerable amount of money for his
737
services. In pure economic terms, the company thus would
have to calculate if the expenses for the assurance process
are covered by the degree of legitimacy gained. Although
such calculation is hardly feasible, cost–benefit consider-
ations are an important factor for a company when it
decides on obtaining external assurance and the quality of
assurance services sought (Park and Brorson 2005; Casey
and Grenier 2015; Cohen and Simnett 2015). Certainly, the
question on who is to provide the assurance is crucial in
this regard and companies can chose from a large range of
providers. In this context, Zorio et al. (2013) have found
that the provision of assurance services by an auditor
instead of a consultant increases the assurance quality.
Therefore, the nature of the provider is a factor that needs
to be considered. Likewise, the company’s sustainability
performance as such seems to be a factor that influences the
assurance process (Park and Brorson 2005). From the
perspective of legitimacy and signaling theory, one must
assume that companies with a good performance are more
likely to obtain assurance since they simply have more or
more positive information to convey. Nevertheless, one
could also argue that companies with poor performance
seek assurance in order to improve their performance and
thus increase their legitimacy in the long run. These con-
tradicting assumptions call for a more extensive discussion
on the impact of sustainability performance.
The Role of Sustainability Performance
While there are currently no empirical studies investigating
the relationship between a firm’s corporate sustainability
performance and assurance quality, the literature on sus-
tainability disclosure provides ample evidence for the
important role that sustainability performance plays in
determining a firm’s sustainability disclosure (Cho and
Patten 2007; Clarkson et al. 2008). With respect to sus-
tainability assurance, Park and Brorson (2005) have iden-
tified the improvement of a company’s actual sustainability
performance as major reason why companies seek external
assurance. As a consequence, Kolk and Perego (2010,
p. 195) call for an empirical investigation of the ‘‘diffusion
of assurance services in relation to a firm’s social and
environmental performance.’’ To the best of our knowl-
edge, there is only one empirical study (Casey and Grenier
2015) that investigates the role of sustainability perfor-
mance in sustainability assurance engagements, yet this
study is limited to the adoption of sustainability assurance
and does not investigate assurance quality in more detail.
Based on a U.S. sample of 2659 firm-year observations for
a period of 18 years, Casey and Grenier (2015) find posi-
tive relationships for both a firm’s sustainability strengths
and a firm’s sustainability concerns, i.e., weaknesses, and
the probability of obtaining external assurance. While the
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positive relationship between sustainability strengths and
assurance adoption indicates that there is no need to gain
extra credibility through assurance in case of low sustain-
ability performance, two explanations could be offered for
the positive relationship between sustainability concerns
and assurance adoption. Firms may ask for additional
assurance to enhance credibility and improve their internal
sustainability-related systems or they may use sustain-
ability assurance for impression management purposes.
Since assurance adoption does not account for the quality
of the assurance engagement, it is difficult to determine
which of these explanations apply.
Examining assurance quality, namely assurance process
depth, instead of assurance adoption thus enables us to
investigate these explanations more thoroughly. On the one
hand, a positive relationship between a firm’s sustainability
performance and assurance process depth could be found if
sustainability assurance is obtained to enhance credibility
among stakeholders or comply with common industry
practices of adopting at least some type of assurance. In
this case, superior sustainability performers obtain in-depth
assurance services, whereas poor sustainability performers
ask for superficial assurance services as in-depth assurance
might disclose the weaknesses, and a rather superficial
assurance can generate some legitimacy.
Moreover, signaling theory also suggests that good
sustainability performers are more likely to obtain in-depth
assurance service because this allows them to send stronger
signals. As Spence (1973) argued, the more one can signal,
the more convincing signaling is. As good sustainability
performance leads to profound assurance in this case, and
poor performance to low quality assurance, we develop
Hypotheses 1a as follows:
H1a There is a positive relationship between corporate
sustainability performance and assurance process depth.
However, the relationship between sustainability per-
formance and assurance process depth can also be dia-
metric, as existing literature has suggested. If firms with a
poor sustainability record are interested in improving their
internal systems, processes, and sustainability perfor-
mance, they can obtain assurance services of high quality
to achieve these goals and to strengthen their credibility
(Park and Brorson 2005). Such a relationship would sub-
stantially differ from the critical notion of sustainability
assurance as a process that is ‘‘captured’’ by the manage-
ment to merely enhance the corporate image. Superior
sustainability performers in turn might also seek less pro-
found assurance services because of the conviction that
their efforts are convincing by themselves and that in-depth
assurance does not create additional value for improvement
or reputation against the background of cost–benefit con-
siderations. Thus, the underlying assumption is that
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K. Hummel et al.
obtaining assurance, even if only of insignificant depth, is
sufficient as a signal to be sent in order to maintain legit-
imacy. In this case, a negative relationship between sus-
tainability performance and assurance process depth exist,
which is why Hypothesis 1b is stated as follows:
H1b There is a negative relationship between corporate
sustainability performance and assurance process depth.
We frame hypotheses H1a and H1b for the dependent
variable assurance process depth (as against assurance
statement breadth) because we expect firms’ influence to be
most prevalent during negotiations with the assurance
provider on the terms of the assurance engagement.
Assurance process depth is thus primarily determined by
the firm based on their motives for assurance adoption and
cost–benefit considerations, whereas assurance statement
breadth is primarily determined by the assurance provider
because the assurance statement is written and delivered by
the assurance provider.
The Role of the Assurance Provider
We identify the affiliation to an accounting versus non-
accounting assurance provider as provider characteristic
that has most commonly been studied in the literature, yet
with differing results. The question whether there are
fundamental differences in the assurance statements pro-
vided by different types of assurance providers has been at
the forefront of studies that investigate assurance state-
ments more thoroughly, i.e., the second group of studies in
the literature review. Most of these studies differentiate
between accounting versus other types of assurance pro-
viders (such as consultants, non-profit organizations, and
certification bodies) and report summary statistics for each
assurance statement element for the different groups of
assurance providers (Ball et al. 2000; O’Dwyer and Owen
2005; Deegan et al. 2006; Mock et al. 2007; Manetti and
Toccafondi 2012). Some of the reported differences might
relate to institutional differences between accountant and
non-accountant companies, for instance, the application of
a certain assurance standard that is mandatory for profes-
sional accountants. Others might reflect cultural differ-
ences. For instance, O’Dwyer and Owen (2005, p. 214)
reckon that accountant assurors are less likely to compre-
hensively report on their competence in the assurance
statement because these assurors believe that the name of
the firm is sufficient ‘‘to indicate competence to undertake
the assurance process.’’ Overall, results from prior studies
are ambiguous with respect to the direction of these dif-
ferences. Recently, Huggins et al. (2011) comprehensively
discuss the pros and cons of accounting versus non-ac-
counting assurance providers with respect to the assurance
of greenhouse gas information. They argue that accounting
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance…
assurance providers have high levels of quality controls
and stringent assurance procedures, whereas non-account-
ing assurors have technical expertise and specific knowl-
edge of the subject matter (i.e., greenhouse gas reporting).
The authors conclude that multidisciplinary teams are
particularly beneficial with respect to the assurance of
greenhouse gas information.
Hypothesis H2a draws on studies that reveal more rig-
orous disclosure of assurance statement elements by
accounting versus non-accounting assurance providers and
thus posits a positive relationship. For instance, Manetti
and Toccafondi (2012) reveal that 29% of the non-ac-
counting assurance providers include no reference to the
applied assurance standard compared to 0% of the
accounting assurance providers and 41% of the non-ac-
counting assurance providers do not state the assurance
level compared to only 9% of the accounting assurors.
With respect to overall measures of assurance quality, both
Perego and Kolk (2012) and Zorio et al. (2013) report
higher assurance quality by accounting versus non-ac-
counting assurance providers. Such a positive relationship
could stem from a higher expertise of accounting assurance
providers in formal aspects of the assurance including the
complete disclosure of a minimum list of assurance state-
ment elements. We formally state this hypothesis as
follows:
H2a There is a positive relationship between affiliation to
an accounting assurance provider and assurance statement
breadth.
However, there are also studies that find the opposite
results. Accounting assurance providers may provide
assurance on a broad range of topics including sustainability,
whereas non-accounting assurance providers are often spe-
cialized in sustainability assurance. As a consequence, non-
accounting assurance providers may have a higher expertise
in sustainability assurance and thus may provide more
comprehensive assurance statements including important
sustainability-specific statement items, such as the materi-
ality of the report. Perego and Kolk (2012), for instance,
provide some descriptive evidence indicating that non-ac-
counting assurance providers are more elaborate and infor-
mative when it comes to formulating recommendations and
conclusions. Moreover, O’Dwyer and Owen (2005) report
that consultant assurors more frequently rely on assurance
standards in the assurance process, include references on
their independence in the assurance statement, report on the
performed procedures of the assurance process, and com-
ment on the completeness of the assured report. Mixed
findings are provided by Mock et al. (2013, p. 291) who show
negative and significant correlations between the provision
of positive assurance and recommendations and Big4 firms
which constitute a large portion of the accounting assurors.
739
Hypothesis H2b therefore relates to a negative relationship
between the affiliation to an accounting assurance provider
and assurance statement breadth.
H2b There is a negative relationship between affiliation
to an accounting assurance provider and assurance state-
ment breadth.
Note that hypotheses H2a and H2b are aimed at assur-
ance statement breadth as dependent variable (and not
assurance process depth) because we expect providers’
influence to become particularly evident with respect to the
breadth of the assurance statement. After all, it is the
assurance provider who authors and delivers the assurance
statement, whereas assurance process depth is determined
by both the client firm and the assurance provider. We
further investigate this distinction in the section ‘‘Results
from regression analysis.’’
Research Design
Sampling and Empirical Model
Our initial sample consists of 195 companies located in
France, Germany, Italy, Spain, Sweden, Switzerland, or
the United Kingdom. To be included, a company must be
listed in the Bloomberg European 500 index as of January
2013, provide sufficient information on its sustainability
performance for the reporting year 2011, and belong to an
industry group that contains at least five companies in
total. Both prerequisites stem from the measurement
approach of corporate sustainability performance that we
apply in this study and which has recently been intro-
duced by Hummel and Schlick (2016). Corporate sus-
tainability performance is measured based on
environmental and social key performance indicators
which a firm is required to report in order to be included
in the sample. Moreover, the rescaling of the original
values requires an industry group of at least five compa-
nies per industry to define reasonable peer groups. Of
these 195 companies, 68% seek external assurance. Fur-
ther, of these 133 companies, eleven are excluded because
the corresponding assurance statements could not be
retrieved from corporate websites, a web search engine, or
by direct request. The sample selection is summarized in
Panel A of Table 1. Our final sample includes 122
European companies across 18 industry groups. The
sample composition is depicted in Panel B of Table 1.
Our sample thus includes only firms that obtain external
assurance because we are interested in the relationships
between firm and provider characteristics and assurance
quality, respectively. While this procedure is common in
research on sustainability assurance (e.g., O’Dwyer and
123
740 K. Hummel et al.

Table 1 Sample selection and sample composition

Panel A: Sample selection
Initial Bloomberg European 500 sample 500
Less: firms not domiciled in France, Germany, Italy, Spain, Sweden, Switzerland, or the United Kingdom -112
388
Less: firms with insufficient data on sustainability performance -151
237
Less: firms that belong to an industry group with less than five companies -42
Sample size (Hummel/Schlick 2016) 195
Less: firms that do not obtain external assurance -62
133
Less: firms of which the assurance statement cannot be obtained -11
Final sample size 122
By country n By industry n

Panel B: Sample composition by country and industry

1 France 26 1 Chemicals 6
2 Germany 18 2 Building materials, paper, steel 10
3 Italy 12 3 Mining 8
4 Spain 19 4 Advertising, entertainment, media 4
5 Sweden 5 5 Telecommunication 9
6 Switzerland 11 6 Computers and software 3
7 United Kingdom 31 7 Car manufacturers 4
8 Retail 4
9 Food and beverages 5
10 Pharmaceuticals 6
11 Oil and gas 8
12 Banking and financial services 18
13 Insurance 4
14 REITS 4
15 Aerospace and defense 5
16 Engineering and construction 9
17 Electricity 7
18 Gas, water, and electricity distribution 8
Total 122 Total 122

Owen 2005; Deegan et al. 2006; Manetti and Toccafondi breadth ¼ b0 þ b1 sustainability performance
2012), we acknowledge that it could induce selection bias þ b2 accounting provider
which could drive our main findings and we address this X
i¼6
concern in our robustness section. þ bi controls
We use the following econometric models to test the i¼3
hypotheses H1a, H1b, H2a, and H2b: X
j¼23 kX
¼29
þ bj industry þ bk country þ e: ð2Þ
depth ¼ b0 þ b1 sustainability performance j¼7 k¼24
þ accounting provider
The variables included in our empirical model are sum-
X
i¼6 X
j¼23
marized in Table 2 along with descriptions and data sour-
þ bi controls þ bj industry
i¼3 j¼7
ces and described in greater detail in the next sections. The
kX
¼29 control variables include firm financial performance, firm
þ bk country þ e: ð1Þ size, firm leverage, provider independence, and both
k¼24 industry and country dummies. The data sources comprise

123
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance… 741

Table 2 Variables overview

Variable Description Source of data

Dependent variables
depth Assurance process depth, measured as an index variable as described in Table 4 and Assurance statement,
in the ‘‘Measurement of assurance statement breadth and assurance process sustainability disclosure
depth’’ section
breadth Assurance statement breadth, measured as an index variable as described in Table 3 Assurance statement
and in the ‘‘Measurement of assurance statement breadth and assurance process
depth’’ section
Main variables of interest
sustainability_performance Firm’s sustainability performance, measured as described in Hummel and Schlick Sustainability disclosure
(2016) and in the ‘‘Variables measurement’’ section
accounting_provider Dummy variable indicating whether the assurance provider is an accounting Assurance statement
company (1) or not (0)
Control variables
financial_performance Financial performance of the client, measured as the free Cash flow (cash flow from Bloomberg database
operating activities - total capital expenditures) in millions of euros per
employee at the end of the fiscal year
size Firm size of the client, measured as the log of total employees at the end of the fiscal Annual report,
year sustainability disclosure
leverage Financial leverage of the client measured as (average total assets/average total Bloomberg database
common equity) during the fiscal year
provider_independence Independence of the assuror, measured as a binary index variable indicating Assurance statement,
potentially threatened independence (0) or not (1) annual report
industry Industry group dummy variables as reported in Panel B of Table 1, and the Bloomberg database,
reference category is banking and financial services annual report
country Country of domicile dummy variables as reported in Panel B of Table 1, and the Bloomberg database
reference category is the UK

assurance statements for the measurement of our dependent
variables, firm’s sustainability disclosure (i.e., corporate
sustainability reports, annual reports, and integrated
reports) for the measurement of firm’s sustainability per-
formance, assurance statements and firm’s annual reports
to determine provider independence and firm size, and the
Bloomberg database to obtain data on the financial per-
formance, leverage, and industry and country affiliation of
the firm.
Measurement of the Dependent Variables
Assurance Statement Breadth
Based on previous research on assurance statement quality
(O’Dwyer and Owen 2005; Manetti and Toccafondi 2012;
Perego and Kolk 2012; Mock et al. 2013; Zorio et al. 2013)
and assurance standards, namely the International Standard
on Assurance Engagements 3000 (ISAE 3000)2 and the
2
Our sample covers the reporting year 2011 and we thus refer to the
ISAE 3000 as of 2004 (International Auditing and Assurance
Standard Board (IAASB) 2004). Note that the standard was revised
in 2013 (International Auditing and Assurance Standard Board
AccountAbility 1000 Assurance Standard (AA1000AS),
and the GRI recommendations, we determine thirteen
assurance statement elements along four categories which
are coded on a binary basis and summed up to the overall
measure assurance statement breadth (breadth). Table 3
provides an overview of these thirteen assurance statement
elements.
General information covers three assurance statement
elements, namely whether the assurance statement is
addressed towards all stakeholders (B1), whether the
assurance statement references an assurance standard (B2),
and whether miscellaneous information is completely
mentioned in the assurance statement (B3). Three assur-
ance statement elements refer to the disclosure of provider
information, such as the description of the provider’s
competence (B4) and independence (B5), and information
on both the firm’s and the provider’s area of responsibility
(B6). Three assurance statement elements cover the breadth
of information that is provided on the assurance process,
namely on the scope (B7), the methods (B8), and the level
Footnote 2 continued
(IAASB) 2013) and the revised standard became effective for assur-
ance reports dated on or after December 15, 2015.

123
742 K. Hummel et al.

Table 3 Measurement of assurance statement breadth

Item Measurement AA ISAE GRI
1000 3000
AS

General information
B1 Addressees Whether the assurance statement is addressed towards all stakeholders (1) or not (0) (X)a (X)a (X)a
B2 Assurance Whether at least one assurance standard is mentioned as framework for the assurance (1) or not X X X
standard (0)
B3 Miscellaneous Whether miscellaneous information (provider’s firm name, provider’s representative, date, and Xb Xc Xd
information place) are completely mentioned in the assurance statement (1) or not (0)
Provider information
B4 Provider Whether the assurance statement contains information on the provider’s competence (1) or not X (X) –e
competence (0)
B5 Provider Whether the assurance statement contains information on the provider’s independence (1) or X X –e
independence not (0)
B6 Area of Whether the assurance statement contains information on both the firm’s and the provider’s X X X
responsibility area of responsibility (1) or not (0)
Assurance process
B7 Scope Whether the assurance statement contains information on the scope of the assurance process X X X
(1) or not (0)
B8 Methods Whether the assurance statement contains information on the methods and procedures of the X X X
assurance (1) or not (0)
B9 Level Whether the assurance statement specifies the level of the assurance (1) or not (0) X X X
Conclusions
B10 Veracity Whether the assurance statement indicates the conclusion/opinion of the assurance provider (1) X X X
or not (0)
B11 Materiality Whether the assurance statement contains information on the materiality of the report (1) or Xf –g X
not (0)
B12 Limitations Whether the assurance statement contains limitations with respect to the sustainability report X X X
(1) or not (0)
B13 Recommendations Whether the assurance statement contains recommendations (1) or not (0) Xh (X) X
Total 0–13
a
Only the addressing of the intended users is mandatory
b
Provider’s representative not contained
c
Provider’s firm name or provider’s representative
d
Only provider’s representative and date
e
Only mentioned as important characteristic of assurance providers
f
Represented by the principles of inclusivity, materiality, and responsiveness
g
ISAE 3000 is not a specialized sustainability assurance standard and requires a conclusion with respect to the specific assurance engagement
h
Observations and/or recommendations
() Brackets indicate non-mandatory elements

(B9) of the assurance. The category conclusions include
four assurance statement elements, namely whether a
conclusion/opinion (B10), information on the materiality of
the report (B11), limitations (B12), and recommendations
(B13) are disclosed. Of the thirteen assurance statement
elements, eleven elements are coded based on disclosure
(1) versus non-disclosure (0). One assurance statement
element (addressees) is coded based on whether the
assurance statement is addressed towards all stakeholders
(1) or not (0). Another statement element (miscellaneous
information) is coded based on whether miscellaneous
information is completely provided in the assurance state-
ment (1) or not (0). Taken together, assurance statement
breadth ranges in the interval between zero (lowest assur-
ance statement breadth) and thirteen (highest assurance
statement breadth) and measures the extent to which an
assurance statement enables its readers to assess the
assurance process. Nine assurance statement elements are
mandatory assurance statement elements according to
ISAE 3000 and AA1000AS. Addressing the intended users

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The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance… 743

Table 4 Measurement of assurance process depth

Item Measurement

Assurance process
D1 Scope The assurance covers
(3) The full report
(2) Numerical values and qualitative statements
(1) Numerical values or qualitative statements
D2 Coverage Proportion of the number of assured sustainability performance indicators relative to the number of reported
sustainability performance indicators
D3 Methods The sum of the following methodologies that are applied in the assurance process: documentation checks, interviews,
data analyses, on-site visits, and public media search
D4 Level The assurance level indicated
(3) High/reasonable
(2) Mixed
(1) Moderate/limited
(0) None
Conclusions
D5 Materiality Whether the assurance statement contains information on the materiality of the report (1) or not (0)
D6 Recommendations Whether the assurance statement contains information indicating that recommendations are provided to the client (1)
or not (0)
Total 0–6

of the assurance statement is mandatory according to both
ISAE 3000 and AA1000AS and recommended by the GRI,
yet the standards do not specify the intended users. We
nevertheless include addressing the assurance statement to
all stakeholders as an element of assurance statement
breadth, since the divergence between the addressees of the
sustainability report and of the corresponding assurance
statement has repeatedly been observed and criticized in
the literature (Ball et al. 2000; O’Dwyer and Owen 2005).
Two assurance statement elements (provider’s competence
and recommendations) are suggested, although they do not
constitute mandatory elements of an assurance statement,
according to ISAE 3000. Moreover, one assurance state-
ment element (materiality) is not mentioned in the ISAE
3000.
Our measure aims at capturing the breadth of the
assurance statement as one aspect of assurance quality.
Nevertheless, it could be argued that this measure is biased
towards the use of the AA1000AS standard, since it com-
prises assurance statement elements that are not required
by ISAE 3000, in particular the assessment of materiality
and the provision of recommendations. The importance of
the principle of materiality with respect to sustainability
disclosure quality is reflected in the release of the GRI
sustainability disclosure standard G4 and has also been
highlighted by researchers (e.g., Hummel and Festl-Pell
2015). The disclosure of limitations and recommendations
in the assurance statement enables the readers to compre-
hensively assess the current state of sustainability disclo-
sure. We thus include these elements in our measure of
assurance statement breadth, because they provide impor-
tant information to the reader and have also been included
in prior content-based studies on assurance statements
(O’Dwyer and Owen 2005; Perego and Kolk 2012).
Assurance Process Depth
Our measurement of assurance process depth primarily
derives from qualitative research on the assurance process,
i.e., the third group of studies in the literature review. We
measure assurance process depth (depth) based on the con-
tent of the assurance statement elements scope, methods,
level, materiality, and recommendations. In addition, we
include coverage which measures the proportion of assured
sustainability performance indicators relative to the number
of reported sustainability performance indicators. Table 4
presents an overview of the measurement of each item of
assurance process depth. Assurance process depth is mea-
sured as the sum of the six items. If necessary, the elements
are proportionally rescaled on a [0, 1] interval. Assurance
process depth thus ranges in the interval between zero
(lowest assurance process depth) and six (highest assurance
process depth).
The first element scope refers to the question of which
disclosures are covered by the assurance engagement.
Scope indicates whether the assurance covers numerical
values or qualitative statements (equals ‘1’), numerical
values and qualitative statements (equals ‘2’), or the full
report (equals ‘3’). Similar to scope, the element coverage
captures the number of core sustainability performance

123
744
indicators that are covered by the assurance. Drawing on
our measurement scheme for sustainability performance
outlined in the ‘Measurement of the independent variables’
section, we measure coverage as the proportion of the
number of assured core sustainability performance indica-
tors relative to the number of reported core indicators. We
argue that a more comprehensive assurance scope and a
higher coverage of core sustainability indicators reflect a
deeper and more intensive assurance process. The third
assurance intensity element methods captures the presence/
absence of five assurance methods, namely documentation
checks, interviews, data analyses, on-site visits, and public
media search, and thus ranges in the interval between zero
(no methods are mentioned) and five (all categories are
mentioned). Previous research highlights that in addition to
the traditional methods of interviews, documentation
checks and data analyses, both on-site visits as well as
public media search are important for ensuring the quality
of sustainability assurance (Park and Brorson 2005; Edgley
et al. 2010; O’Dwyer 2011). For instance, on-site visits
help assurance providers to evaluate the rigor and quality
of the data collection processes (Park and Brorson 2005,
p. 1102) as well as the implementation of codes of conduct
(O’Dwyer 2011, p. 1246). Public media search on the other
hand enables assurors to critically reflect on the content of
the firm’s sustainability disclosure against stakeholder
criticism and potentially concealed sustainability-related
risks (Edgley et al. 2010, p. 546). We therefore argue that
assurance based on a broader spectrum of different
methodologies correspond with a deeper assurance
processes.
The fourth element level corresponds to the assurance
engagement risk of having not detected any circumstances
that may call into question the assuror’s opinion on the
objects being examined. According to AA1000AS, ‘‘the
assurance provider achieves high assurance where suffi-
cient evidence has been obtained to support their statement
such that the risk of their conclusion being in error is very
low but not zero.’’3 A higher level of assurance requires
more intensive assurance procedures to sufficiently reduce
assurance engagement risk. Materiality refers to an assur-
ance engagement in which the assuror is requested to
assess whether the sustainability report reflects ‘‘the orga-
nization’s significant economic, environmental and social
impacts’’ (Global Reporting Initiative (GRI) 2013, p. 17).
Finally, recommendations refer to suggested improvements
to a company’s sustainability reporting, systems, and pro-
cesses. The preparation of recommendations requires
additional work by the assuror and thus indicates a more
intensive assurance engagement. O’Dwyer (2011)
3
Instead of ‘‘high’’ and ‘‘moderate,’’ the ISAE 3000 proposes the
terms ‘‘reasonable’’ and ‘‘limited’’.
123
K. Hummel et al.
highlights the advisory nature of this statement element.
The interviewed assurance providers in his case study
emphasize: ‘‘That is very important, because that is really
what the clients pay for.’’ (O’Dwyer 2011, p. 1247) It is
crucial to note that recommendations of the assurance
process depth variable slightly differs from the assurance
statement breadth element as the latter includes only rec-
ommendations that are explicitly described in the assurance
statement, while the former includes all sorts of
recommendations.
Similar to potential criticism regarding our assurance
statement breadth measure, it might be argued that our
measure of assurance process depth is positively biased
towards the use of AA1000AS with subsequent effects on
the relationship between the accounting assurance provider
and assurance process depth. We in turn argue that both the
assessment of the materiality of the sustainability report
and the provision of recommendations are important
aspects of an in-depth assurance engagement and thus
reflect assurance quality. Moreover, in our robustness
section we provide additional analyses addressing these
concerns.
In order to determine assurance statement breadth and
assurance process depth of the 122 companies in the final
sample, we conducted a directed content analysis of the
assurance statements in question (Weber 1990; Hsieh and
Shannon 2005). To guarantee the validity and reliability of
the results obtained, two assumptions hold: (1) all assur-
ance statements are independent of each other4; and (2) the
elements can be coded into a nominal scale and are
mutually exclusive and exhaustive (Stemler 2001). To rule
out researcher bias, the assurance statements were coded
independently by two researchers using the binary scoring
method described above (Campbell and Swinscow 2009).
Finally, we moderated the results of the coders and
aggregated the results.
Measurement of the Independent Variables
Corporate Sustainability Performance
To measure corporate sustainability performance (sustain-
ability_performance) we follow the approach developed by
Hummel and Schlick (2016). Based on the GRI reporting
guidelines, the authors derive eight core sustainability
performance indicators that can be applied to firms in
different industry groups. The scheme comprises four
environmental and four social performance indicators that
4
One may argue that assurance statements provided by the same
assurance provider are not independent from each other and we
address this concern in the robustness section by including provider
fixed effects in our models.
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance…
are evaluated based on hand-recorded data. The environ-
mental performance indicators include energy consump-
tion, water withdrawal, greenhouse gas emissions, and total
weight of waste. The social performance indicators include
employee turnover, lost time incident rate, employee
training, and share of women in the highest corporate
bodies.5 After the raw indicator data are winsorized at a
10% level and proportionally [0, 1] normalized on an
industry group basis, the indicators are aggregated into the
total sustainability performance score by calculating their
mean. Thus, sustainability_performance is a continuous
variable that ranges in the interval between zero and one
and higher values indicate higher sustainability perfor-
mance. An overview of the measurement approach is
provided in Table 5. Note, that we calculate the sustain-
ability performance variable for the sample of 195 Euro-
pean firms which includes both firms that obtain external
assurance and firms that do not obtain external assurance.
This approach to measuring sustainability_performance
is especially useful for our research setting because sus-
tainability reports typically refer to both environmental and
social dimensions. Firms seek to protect their perceived
legitimacy on both dimensions by increasing their sus-
tainability report’s credibility through external assurance.
Thus, the applied measurement scheme directly addresses
the two dimensions and comprehensively covers sustain-
ability performance within them.
Accounting Assurance Provider
accounting_provider is a dummy variable that equals 1 if
the assurance provider belongs to an accounting firm and 0
if not. Accounting firms typically comprise the Big4
companies, i.e., Deloitte, Ernst & Young, KPMG, or
PricewaterhouseCoopers, and other small accounting firms.
Non-accounting assurance providers are service companies
that are typically specialized in consulting, reporting, and
assurance for non-financial areas, for example, SGS,
Bureau Veritas, and Corporate Citizenship.
Control Variables
In addition to our main variables of interest, we include the
following control variables: firm financial performance,
firm size, firm leverage, independence of the assurance
provider, country of origin, and industry affiliation.
5
A detailed description of the performance indicators is provided by
Hummel and Schlick (2016).
745
Prior research has shown a positive relationship between
the firm’s financial performance and the voluntary adoption
of sustainability assurance (Simnett et al. 2009; Ruhnke
and Gabriel 2013). On the other hand, Zorio et al. (2013)
do not obtain a significant relationship between firm’s
financial performance and assurance statement quality.
This insignificant result could be attributed to the focus on
assurance statement in contrast to assurance process, which
we argue is more influenced by the assurance provider than
the assurance seeking firm. We measure financial perfor-
mance (financial_performance) as the free cash flow in
millions of euros per employee at the end of the fiscal year.
Since higher assurance quality is associated with higher
costs, we expect a positive relationship between a firm’s
financial performance and assurance quality, in particular
assurance process depth.
We also control for firm size, which researchers argue
serves as a proxy for public pressure (e.g., Patten 1991) and
firms may respond to increased pressure through the
adoption of sustainability assurance which has been found
by Casey and Grenier (2015), Darnall et al. (2009), Ruhnke
and Gabriel (2013), and Simnett et al. (2009). Firm size
(size) is measured as the decimal logarithm of the number
of employees at the end of the fiscal year and we expect to
find a positive relationship between firm size and assurance
quality, in particular assurance process depth.
Next, we include the financial leverage of a company,
which refers to the informational needs of a company’s
creditors. Because creditors of a highly leveraged firm may
demand higher security regarding sustainability-related
risks to assess the long-term success of a company, lever-
age may be positively related to assurance quality. How-
ever, high leverage may also indicate financial difficulties
or a shareholder structure dominated by myopic investors
who demand cost cutting. Such a negative relationship
between leverage and assurance adoption has been found
by Casey and Grenier (2015). We measure leverage
(leverage) as the average total assets divided by average
total common equity. Due to these contradictory theoretical
considerations, we do not predict the sign of the corre-
sponding regression coefficient.
In addition, we include the independence of the
assurance provider as additional control variable since
findings from the financial audit literature suggest that
limited auditor independence corresponds to lower audit
quality (DeAngelo 1981; Blay and Geiger 2013). This
finding is qualified by studies that report no relationship
or even a negative relationship depending on market
conditions and audit firm rotation (Daniels and Booker
2011; Jamal and Sunder 2011). We argue that an inde-
pendent assurance provider can more easily stipulate
more comprehensive assurance services for the self-
serving purpose of increasing revenues. Consequently, we
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746 K. Hummel et al.

Table 5 Measurement of corporate sustainability performance (Hummel and Schlick 2016)

Performance indicator Measurement Unit

Environmental dimension
Energy consumption (Direct ? indirect energy consumption)/number of employeesa MW/
employee
Water withdrawal (Total water withdrawal - cooling water)/number of employeesa m3/
employee
Greenhouse gas emissions (GHG protocol scope 1 ? scope 2 emissions)/number of employeesa t/employee
Total weight of waste Total weight of waste/number of employeesa t/employee
Social dimension
Employee turnover Total number of employeesa who leave/number of employeesa 9 100 Percent
Lost time incident rate Number of incidents resulting in lost time from work/(total hours worked/200,000) Incidents/h
Employee training Total training time/number of employeesa h/
employee
Share of women in the highest Total number of women in the highest corporate bodiesb/total number of members of the Percent
corporate bodiesb highest corporate bodiesb 9 100
a
If available, the number reflects full-time equivalents and, otherwise, headcount
b
Management board and supervisory board for two-tier system countries, board of directors for one-tier system countries

expect to find a positive relationship between assuror Results

independence and assurance process depth. Common
proxies for auditor independence in the financial audit
literature are often derived from audit fees (Blay and
Geiger 2013; Markelevich and Rosner 2013). However, a
similar approach is not feasible with respect to the
measurement of assuror independence because companies
do not separately disclose their expenses for sustainabil-
ity assurance services. We therefore rely on four condi-
tions that might indicate constraints on assuror
independence. Our variable provider_independence indi-
cates potentially threatened provider independence if at
least one of these constraints is present (equals ‘0’) or
none is present (equals ‘1’). These conditions include
additional sustainability-related consulting or assurance
services, congruence between assuror and financial
statement auditor, the characterization of the engagement
as an iterative process, and a negative or missing dec-
laration of independence (AccountAbility 2008; IFAC
2013).
Moreover, many studies have demonstrated the impact
of institutional country-level factors on sustainability
practices (Fifka and Drabble 2012; Fifka and Pobizhan
2014) in general, but also on the probability of assurance
adoption in specific (Kolk and Perego 2010; Cho et al.
2014). Thus, we include country dummy variables to
account for potential differences arising from different
regulatory, cultural, and societal environments. Finally,
sustainability practices as well as accountability and
transparency toward external stakeholders also vary across
industries (Reverte 2009; Kolk 2010; Matisoff et al. 2013;
Zorio et al. 2013). We account for this variability by also
including industry group dummies.
Descriptive Statistics
Panel A of Table 6 presents descriptive statistics on the
disclosure of the thirteen assurance statement elements.
Overall, assurance statement breadth is rather high, since
eight assurance statement elements, namely assurance
standard, miscellaneous information, provider indepen-
dence, area of responsibility, scope, methods, level, and
veracity, exhibit mean values above 0.75. On the other
hand, in line with previous studies (O’Dwyer and Owen
2005; Deegan et al. 2006; Cooper and Owen 2007; Manetti
and Toccafondi 2012) only 13% of the assurance state-
ments are addressed towards all stakeholders and only 57%
describe the provider’s competence. Moreover, only 37%
of the assurances cover the materiality of the report, only
17% of the assurance statements identify limitations on the
sustainability report and only 44% delineate recommen-
dations. Taken together, assurance statements on average
provide sufficient information on general issues, the
assurance provider, and the assurance process, but lack
information regarding the conclusion of the assurance.
Panel B of Table 6 presents descriptive statistics on
the six assurance process depth elements scope, coverage,
methods, level, materiality, and recommendations. While
the data in Panel A depict the disclosure of the assurance
statement elements, the data in Panel B refer to the
content of the assurance statement elements and thus
capture the depth and intensity of the assurance
engagement. The descriptive statistics on scope reveal
that only 7% of the sample firms seek assurance of the
full report, while most companies ask for assurance only

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The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance… 747

Table 6 Descriptive statistics

n Min Max Mean SD
for model variables
Panel A: Descriptive statistics for the assurance statement breadth elements
B1 Addressees 122 0.00 1.00 0.13 0.34
B2 Assurance standard 122 0.00 1.00 0.93 0.26
B3 Miscellaneous information 122 0.00 1.00 0.79 0.41
B4 Provider competence 122 0.00 1.00 0.57 0.50
B5 Provider independence 122 0.00 1.00 0.80 0.40
B6 Area of responsibility 122 0.00 1.00 0.97 0.18
B7 Scope 122 0.00 1.00 1.00 0.00
B8 Methods 122 0.00 1.00 0.98 0.13
B9 Level 122 0.00 1.00 0.89 0.31
B10 Veracity 122 1.00 1.00 1.00 0.00
B11 Materiality 122 0.00 1.00 0.37 0.48
B12 Limitations 122 0.00 1.00 0.17 0.38
B13 Recommendations 122 0.00 1.00 0.44 0.50
0 1 2 3 4 5 Mean SD

Panel B: Descriptive statistics for the assurance process depth elements (original values before rescaling)
D1 Scope – 31% 61% 7% – – 1.76 0.58
D2 Coverage – – – – – – 0.80 0.26
D3 Methods 2% 0% 9% 37% 44% 8% 3.47 0.89
D4 Level 11% 69% 17% 3% – – 1.13 0.63
D5 Materiality 63% 37% – – – – 0.37 0.48
D6 Recommendations 45% 55% – – – – 0.55 0.50
n Min Max Mean SD

Panel C: Descriptive statistics for the regression variables

(1) breadth 122 3.00 12.00 9.04 1.58
(2) depth 122 1.43 5.80 3.04 1.06
(3) sustainability_performance 122 0.06 0.93 0.55 0.18
(4) accounting_provider 122 0.00 1.00 0.82 0.39
(4) financial_performance 122 -1.97 1.17 0.02 0.31
(7) size 122 1.93 5.46 4.56 0.68
(8) leverage 122 -72.03 62.48 6.04 10.98
(6) provider_independence 122 0.00 1.00 0.26 0.44
Panel A of the table descriptive statistics for the elements included in the dependent variable breadth. Panel
B of the table descriptive statistics for the elements included in the dependent variable depth. Note that the
categories ‘0’ to ‘5’ do not apply to coverage which is a continuous variable. Panel C shows breadth and
depth on an aggregated level along with the other variables included in the regression analysis

on selected numerical values and/or qualitative state-
ments. Similarly, most firms (69%) request a moderate
level of assurance, 17% rely on mixed levels, and only
3% seek a high assurance level. The remaining 11% of
assurance statements do not provide an assurance level,
indicating a superficial assurance engagement of low
depth. In addition, only 37% of the firms mandate their
assurance providers to assess the materiality of their
sustainability reports. A more positive picture is revealed
by the results for coverage, methods, and recommenda-
tions. Of the core sustainability indicators covered by our
measurement scheme for sustainability_performance, on
average, 80% are verified by an external assuror. More-
over, more than three different classes of evidence-
gathering methods are applied on average in the assur-
ance process by the assurors. Finally, 55% of the firms

123
748
are also provided with recommendations on future
improvements.
Panel C of Table 6 presents the descriptive statistics for
the regression variables. The positive findings on the
assurance statement breadth elements directly translate into
a mean of 9.04 and a standard deviation of 1.58 for the
dependent variable breadth. The mixed findings of the
assurance process depth elements result in a mean of 3.04
and standard deviation of 1.06 for the dependent variable
depth. The variable sustainability_performance ranges
between a minimum value of 0.06 and a maximum value of
0.93, with a mean of 0.55. These results are similar to those
of Hummel and Schlick (2016) and do not indicate selec-
tion bias in our sample with respect to sustainability per-
formance. With respect to our second variable of interest—
accounting_provider—we find 82% of the assurance pro-
viders are accounting firms and all of them belong to the
Big4 accounting firms, namely Deloitte, Ernst & Young,
KPMG, or PricewaterhouseCoopers. Non-accounting
assurance providers in our sample include Bureau Veritas,
DNV, Two Tomorrows,6 ERM, LRQA, AENOR, Corpo-
rate Citizenship, and Sustainability and Excellence. With
respect to the control variables, firms’ financial perfor-
mance exhibit substantial heterogeneity, which results from
the variety of industry groups contained in the sample.
Descriptive statistics on size (original values, untabulated)
show that 73,430 employees work for our sample firms on
average during 2011 and we also find substantial hetero-
geneity with respect to the capital structure of our sample
firms. Finally, provider_independence is rather low with a
mean of 0.26. Low levels of provider independence reflect
the nature of sustainability assurance engagements, i.e.,
providers are often engaged in additional consulting or
auditing services and iterative interaction with their clients.
Table 10 in the appendix presents the correlation matrix for
the regression model variables which indicates no multi-
collinearity problems.
Results from Univariate Analysis
We use a t test of means to identify significant differences
in the assurance process depth elements and the assurance
statement breadth elements between poor and high sus-
tainability performers and non-accounting and accounting
assurance providers. For this purpose, we divide our sam-
ple into poor and high sustainability performers based on
the median sustainability performance. The results are
presented in Table 7.
The results reveal significant differences between poor
and high sustainability performers with respect to the dis-
closure of the assurance standard, the disclosure on
6
In May 2012, Two Tomorrows was acquired by DNV.
123
K. Hummel et al.
provider independence, and area of responsibility. These
assurance statement elements are more often disclosed in
the group of poor sustainability performers compared to
high sustainability performers. Not in line with our
expectations, there are no significant differences in the
assurance process depth elements between poor and high
sustainability performers.
With respect to the assurance provider, the results reveal
that accounting assurance providers more often give
information on the assurance standard, area of responsi-
bility, the methods, and the level of the assurance and
complete information on miscellaneous issues, such as
provider name and representative, date, and place. The
higher disclosure of the assurance level by accounting
assurors is also reflected in the assurance process depth
element level. On the other hand, non-accounting assurors
more often address all stakeholders, describe the provider
competence, provide information on the materiality of the
report, and disclose recommendations in the assurance
statement. Again, these differences are also reflected in the
assurance process depth elements materiality and recom-
mendations. These findings are primarily in line with
findings provided by Perego and Kolk (2012, p. 184) who
describe that accounting assurors are more likely to dis-
close formal assurance statement elements, such as the
applied assurance standard, information on the provider
firm name, and area of responsibility, but are more hesitant
in disclosing information on the materiality examination
and recommendations. Some of the differences reported in
Table 7 might stem from the preferred use of ISAE 3000
by accounting assurors and AA1000AS by non-accounting
assurors, in particular differences in the disclosure of
materiality assessments and we address this concern in the
robustness section. Taken together, while there are a
number of significant differences in the assurance state-
ment elements between accounting and non-accounting
assurance providers, we find only limited support for our
assumption that the firm’s sustainability performance also
plays an important role with respect to the assurance
engagement. In the next section, we will test our
hypotheses based on multiple linear regression models.
Results from Regression Analysis
The results from multiple regression analyses with robust
standard errors (White 1980) are shown in Table 8. We
present stepwise regression models, gradually introducing
country and industry fixed effects. The results presented in
column III and column VI correspond to our full models,
i.e., Eqs. (1) and (2), respectively. Columns I–III refer to
assurance process depth, and columns IV–VI refer to
assurance statement breadth.
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance… 749

Table 7 Results of t tests of mean assurance statement breadth elements and assurance process depth elements
Poor High t value Non-accounting Accounting t value
sustainability sustainability assurors assurors
performers performers (n = 22) (n = 100)
(n = 63) (n = 59)
Mean SD Mean SD Mean SD Mean SD

Panel A: Assurance process depth elements

D1 Scope 1.7619 0.4988 1.7627 0.6523 -0.0077 1.7727 0.6853 1.7600 0.5527 0.0935
D2 Coverage 0.8298 0.2426 0.7600 0.2662 1.5154 0.7976 0.2727 0.7957 0.2532 0.0323
D3 Methods 3.4603 0.9302 3.4746 0.8581 -0.0878 3.2273 1.3428 3.5200 0.7585 -1.3984
D4 Level 1.1587 0.5738 1.1017 0.6872 0.4988 0.8636 0.8335 1.1900 0.5631 -2.2389*
D5 Materiality 0.3968 0.4932 0.3390 0.4771 0.6574 0.5455 0.5096 0.3300 0.4726 1.9090*
D6 Recommendations 0.5873 0.4963 0.5085 0.5042 0.8700 0.9091 0.2942 0.4700 0.5016 3.9509***
Panel B: Assurance statement breadth elements
B1 Addressees 0.1429 0.3527 0.1186 0.3261 0.3929 0.4545 0.5096 0.0600 0.2387 5.5102***
B2 Assurance standard 0.9683 0.1767 0.8814 0.3261 1.8455* 0.8184 0.3948 0.9500 0.2190 -2.1649**
B3 Miscellaneous information 0.8095 0.3958 0.7671 0.4291 0.6268 0.5000 0.5118 0.8500 0.3589 -3.8112***
B4 Provider competence 0.5556 0.5009 0.5763 0.4984 -0.2288 0.7273 0.4558 0.5300 0.5016 1.6961*
B5 Provider independence 0.9048 0.2959 0.6949 0.4644 2.9959*** 0.9091 0.2942 0.7800 0.4163 1.3784
B6 Area of responsibility 1.0000 0.0000 0.9322 0.2536 2.1229** 0.8636 0.3513 0.9900 0.1000 -3.1063***
B7 Scope 1.0000 0.0000 1.0000 0.0000 1.0000 0.0000 1.0000 0.0000
B8 Methods 0.9841 0.1260 0.9831 0.1302 0.0464 0.9091 0.2942 1.0000 0.0000 -3.1363***
B9 Level 0.9365 0.2458 0.8475 0.3626 1.5966 0.6818 0.4767 0.9400 0.2387 -3.7219***
B10 Veracity 1.0000 0.0000 1.0000 0.0000 1.0000 0.0000 1.0000 0.0000
B11 Materiality 0.3968 0.4932 0.3390 0.7743 0.6574 0.5455 0.5096 0.3300 0.4726 1.9090*
B12 Limitations 0.2063 0.4079 0.1356 0.3453 1.0306 0.2727 0.4558 0.1500 0.3589 1.3800
B13 Recommendations 0.4444 0.5009 0.4407 0.5007 0.0415 0.8182 0.3848 0.3600 0.4824 4.1551***
The table presents descriptive statistics on all assurance process depth elements (Panel A) and assurance statement breadth elements (Panel B) for
poor versus high sustainability performers and non-accounting versus accounting assurors. Poor sustainability performers are firms with a
sustainability performance score equal to or below the median. Accounting assurors are those assurance providers that are affiliated to the
accounting profession
***, **, and * Significance at the 1, 5, and 10% level, respectively (two-sided tests)

With respect to our first set of hypotheses, we find a
negative relationship between sustainability performance
and assurance process depth, which supports H1b. On
average, poor sustainability performers seek more in-depth
assurance services to enhance their internal systems, pro-
cesses, and sustainability performance. These poor sus-
tainability performers benefit the most from an intensive
assurance engagement, because they are more likely to face
legitimacy threats and need to demonstrate the seriousness
of their endeavors. Accordingly, superior sustainability
performers on average demand less in-depth assurance
services owing to cost–benefit considerations. As expected,
we find this relationship only for assurance process depth,
but not for assurance statement breadth. This finding sup-
ports our reasoning that client firms primarily influence the
depth of the assurance engagement which is determined
based on negotiations with the assurance provider before
the contract is signed, but not the assurance statement
which is ultimately delivered by the assurance provider.
Regarding our second set of hypotheses, the results
reveal a negative and significant relationship between the
affiliation to an accounting assurance provider and assur-
ance statement breadth, which supports hypothesis H2b.
Assurance statements delivered by non-accounting assur-
ance providers are broader compared to assurance state-
ments delivered by accounting assurors which is in line
with the findings provided by O’Dwyer and Owen (2005).
Except for one model specification (column II), we obtain
this result only for assurance statement breadth but not for
assurance process depth. This finding again supports our
reasoning that assurance providers particularly influence
the breadth of the assurance statement as they ultimately
deliver the assurance statement, whereas their influence on
the depth of the assurance process is limited. This finding is

123
750 K. Hummel et al.

Table 8 Regression results: main model

(I) (II) (III) (IV) (V) (VI)
depth depth depth breadth breadth breadth

sustainability_performance H1a: ?; H1b: - -1.0115* -0.8681* -1.1945*** -1.2233 -0.4678 -0.5105

(-1.8685) (-1.7829) (-2.8152) (-1.6502) (-0.7219) (-0.7172)
accounting_provider H2a: ?; H2b: - -0.4246 -0.6078** 0.1563 -1.2440*** -1.2692*** -1.5422***
(-1.5181) (-2.1790) (0.6149) (-3.2479) (-3.4184) (-3.6168)
financial_performance ? 0.4749 0.4823 1.1026*** 0.0596 0.1695 0.2900
(1.3465) (1.5378) (3.5167) (0.1233) (0.4061) (0.5514)
size ? 0.1566 0.0488 0.3269* 0.4842** 0.4016** 0.6206**
(0.9483) (0.3230) (1.9419) (2.1408) (1.9989) (2.1970)
leverage ? -0.0153 -0.0202** -0.0288*** 0.0073 0.0082 0.0251
(-1.6147) (-2.4499) (-3.1284) (0.5634) (0.7493) (1.6256)
provider_independence ? 0.5287** 0.2336 0.4943** 0.5112 0.0093 -0.0858
(2.3286) (1.1253) (2.5973) (1.6440) (0.0335) (-0.2687)
intercept 3.4765*** 3.7776*** 2.9367*** 8.3785*** 8.4325*** 7.1247***
(4.3623) (5.3002) (3.4903) (7.6774) (8.8891) (5.0476)
industry dummies No No Yes No No Yes
country dummies No Yes Yes No Yes Yes
observations 122 122 122 122 122 122
2
adjusted R 0.0908 0.3228 0.5285 0.0988 0.3702 0.3147
F statistic 3.0137*** 5.8055*** 5.6765*** 3.2099*** 6.9275*** 2.9163***
The table reports ordinary least squares coefficient estimates and t statistics (in parentheses) based on Huber–White robust standard errors. ***,
**, and * indicate statistical significance at the 1, 5, and 10% level, respectively (two-sided tests)

more in line with the results obtained by O’Dwyer and
Owen (2005), who observe a higher disclosure rate of
assurance statement items (including the assurance stan-
dard applied, provider’s competence, and provider’s inde-
pendence) by consultant versus accounting assurance
providers. In this regard, more recent investigations tend to
reveal a higher assurance statement quality by accounting
versus consultant assurors (Perego and Kolk 2012; Zorio
et al. 2013). We caution our readers to interpret these
findings against the background of the measure used for
assurance statement quality and assurance statement
breadth, respectively. In particular, our measure of assur-
ance statement breadth might be positively biased towards
the use of AA1000AS, which might affect the relationship
between assurance provider and assurance statement
breadth. We address this concern in the robustness section
of the paper.
With respect to our control variables, there is a positive
relationship between firms’ financial performance and
assurance process depth, yet only for the full model
including industry and country fixed effects. This finding is
in accordance with results obtained by Simnett et al. (2009)
and Ruhnke and Gabriel (2013) on assurance adoption. As
expected, more in-depth assurance services are more
costly, and firms’ financial performance seems to deter-
mine the capacity to bear these additional expenses.
Nevertheless, higher assurance statement breadth is not
necessarily associated with higher costs and is thus not
related to the firm’s financial performance. We also find a
positive relationship between size and both assurance
statement breadth and assurance process depth. In this
context, firm size serves as a proxy for public pressure.
Larger firms may deal with this pressure through broader
assurance statements, providing additional credibility
among their stakeholders.
Leverage is negatively related to assurance process
depth, which is consistent with the results provided by
Casey and Grenier (2015). One potential reason for this
negative relationship could be stronger bank monitoring
that restrains highly leveraged firms from seeking in-depth
(and expensive) assurance services. With respect to
provider_independence, the results show a positive and
significant relationship with assurance process depth. This
finding may indicate that independent assurors presumably
possess more negotiating power and thus are more likely to
convince the client to purchase more in-depth assurance
services (O’Dwyer 2011; O’Dwyer et al. 2011). However,
there is no significant relationship between independence
and assurance statement breadth, which is contrary to our
reasoning that provider characteristics are more strongly
related to assurance statement breadth than to assurance
process depth. Finally, consistent with previous studies, we

123
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance…
find significant differences (not tabulated) depending on
industry (Simnett et al. 2009; Cho et al. 2014) and country
(Simnett et al. 2009; Kolk and Perego 2010; Ruhnke and
Gabriel 2013) dummies.
Analyses of Robustness
We perform a number of supplemental analyses to check
the robustness of our results. First, we re-run the regression
analyses with alternative measures for sustainability per-
formance, financial performance, size, and leverage. More
precisely, we winsorize the sustainability performance data
at the 5 and 1% levels instead of 10%, and we use return on
assets and return on equity as alternative proxies for
financial performance, a log-transformation of the market
capitalization and total assets as alternative proxies for firm
size, and total debt to total assets as alternative proxy for
leverage. Moreover, we run specifications with financial
performance and leverage being winsorized at the 1, 5, and
10% level to minimize the effects of potential outliers.
None of these variations substantial alter our main findings.
We also disaggregate our provider independence measure
into four binary variables that correspond with the condi-
tions of our original variable. This procedure provides
valuable insights into how the various aspects of inde-
pendence relate to assurance statement breadth and assur-
ance process depth, respectively.
While our main results on sustainability performance
and accounting assuror do not change, the results reveal
that the declaration of independence and additional con-
sulting activities are both negatively related to breadth and
there are no significant relationships between the other
binary disaggregated variables of independence and our
dependent variables. We also experiment with different
clusterings, namely by country and accounting_provider.
The results tend to be robust, yet the relationship between
accounting_provider and assurance statement breadth
becomes insignificant when clustering by country. We also
re-run the regression analyses including provider fixed
effects instead of the distinction between accounting versus
non-accounting assurors. The results reveal negative and
significant relationships with assurance statement breadth
for some (KPMG, Ernst & Young, and Pricewater-
houseCoopers) but not all accounting assurance providers.
Taken together, this first set of robustness tests suggests
that our main results are robust to the measurement of our
independent variables.
Second, we investigate whether the sample selection
might bias our findings since we exclude firms from our
analysis that do not obtain external assurance. First, based
on a t test of means we investigate whether there are fun-
damental differences in the firm characteristics between
firms that are included in our sample and thus obtain
751
external assurance (n = 122) and those firms that are
excluded from our sample and do not obtain external
assurance (n = 73).7 The results indicate no significant
differences between these two groups with respect to the
firm characteristics except for firm size. Next, we assign
the dependent variables breadth and depth as well as
accounting_provider and provider_independence the value
of zero for our subsample of firms that do not obtain
external assurance and re-run the regression analyses for
the full sample of 195 firms. The results from this analysis
(untabulated) remain similar to our main findings except
for the relationship between accounting_provider and
breadth and depth which is now positive. However, this
positive relationship can be explained by the scoring since
these variables are scored zero (instead of missing value)
for the subsample of firms that do not obtain external
assurance. Therefore, the results from this second set of
robustness tests alleviate our concerns that our results are
biased due to the sampling procedure.
Third, we investigate whether our main results are driven
by the applied assurance standard. One may argue that the
relationship between affiliation to the accounting assurance
provider and assurance statement breadth may be caused by
spurious correlations due to the omission of the applied
assurance standard. In particular, our measurement of
assurance statement breadth might be positively biased to the
use of the assurance standard AA1000AS since all assurance
statement elements are required by AA1000AS, but not by
ISAE 3000 and professional accountants affiliated with
national accountants’ associations that are members of the
International Federation of Accountants (IFAC) are obli-
gated to consider ISAE 3000 in their work. Therefore,
accounting assurors are more likely to apply ISAE 3000,
whereas non-accounting assurors are more likely to apply
AA1000AS which might cause the negative relationship
between accounting provider and assurance statement
breadth. We run a number of tests to investigate this concern.
First, we investigate differences in the use of the two stan-
dards for accounting and non-accounting assurors based on
contingency tables and the corresponding Chi square
statistic. The results reveal indeed that accounting assurors
use ISAE 3000 more and AA1000AS less frequently than
non-accounting assurors (Panel A of Table 9). Next, we re-
run the regression analyses including additional dummy
variables indicating the use of the ISAE 3000 and
AA1000AS standards.8 The results from this analysis reveal
7
More precisely, this subsample of 73 firms includes both firms that
do not obtain external assurance and firms that obtain assurance but
do not provide the corresponding assurance statement.
8
More precisely, ISAE 3000 equals ‘‘1,’’ if the ISAE 3000 standard
is applied and ‘‘0’’ otherwise. Accordingly, AA1000AS equals ‘‘1,’’ if
the AA1000AS standard is applied and ‘‘0’’ otherwise. Please note
that this model specification has some multicollinearity concerns due
123
752
positive relationships between the use of the ISAE 3000 and
breadth for all model specifications and positive relationship
between the use of the AA1000AS and both depth and
breadth for all model specifications (columns I–VI of Panel B
of Table 9). Nevertheless, our main result on the relationship
between accounting provider and assurance statement
breadth still holds. Next, we specifically address the concern
that our measures for assurance statement breadth does not
score highest for assurance statements that are completely in
line with the reporting requirements of the applied assurance
standard, in particular ISAE 3000. Therefore, we exclude the
assurance statement elements addressees, materiality, and
recommendations from the measurement of assurance
statement breadth. We also exclude materiality and recom-
mendations from the measurement of assurance process
depth, as these elements are not required by the assurance
standard ISAE 3000. We re-run the analyses with the alter-
native proxies breadth1 (excluding B1), breadth2 (excluding
B4), breadth3 (excluding B11), breadth4 (excluding B13),
and breadth5 (excluding B4, B11, and B13) as well as depth1
(excluding D5), depth2 (excluding D6), and depth3 (ex-
cluding D5 and D6) instead of assurance statement breadth
and assurance process depth, respectively. The full results
are displayed in Panel C of Table 9.
Except for depth2 and depth3, the results from our base-
line models still hold. This robustness analysis provides two
important insights. First, the negative relationship between
accounting assurance provider and assurance statement
breadth persists, even if we exclude those assurance state-
ment elements that are not mandatory according to ISAE
3000. This finding demonstrates that the negative correlation
between accounting assurance provider and assurance
statement breadth is not primarily driven by the applied
measurement of assurance statement breadth, in particular
by the inclusion of elements that are only mandatory
according to AA1000AS, but also holds for a less compre-
hensive measurement of assurance statement breadth. Sec-
ond, the negative relationship between sustainability
performance and assurance process depth does not hold for
an alternative measure of assurance process depth that does
not account for the provision of recommendations. This
finding indicates that the provision of recommendations
seems to be critical for the relationship between sustain-
ability performance and assurance process depth, which
further corroborates our reasoning that poor sustainability
performers obtain in-depth assurance services to enhance
their internal sustainability-related processes and systems.
For such enhancements, the provision of recommendations is
of great importance.
Footnote 8 continued
to the strong correlation between the assurance provider and the use
of the ISAE 3000 standard.
123
K. Hummel et al.
We also investigate whether our assurance process depth
measure is influenced by the assurance level since ISAE
3000 No. 49 states: ‘‘The degree to which the practitioner
considers each of these components is affected by the
engagement circumstances, in particular […] whether a
reasonable assurance or a limited assurance engagement is
performed.’’ (International Auditing and Assurance Stan-
dard Board (IAASB) 2004) For this purpose, we investigate
differences in the assurance process depth elements between
those firms with a limited assurance level and those firms
with a reasonable assurance level. Results from a t test of
means do not indicate significant differences between the
two groups, except for coverage. Overall, the results from
this third set of robustness checks attenuate potential con-
cerns regarding the influence of the applied assurance stan-
dards in our models.
Finally, we address potential endogeneity concerns
resulting from the possibility that firms might choose their
assurance provider based on the provider’s reputation. In
this case, the relationship between sustainability perfor-
mance and assurance process is mediated by the accounting
provider which might influence our results. We therefore
build a structural model in which sustainability perfor-
mance influences assurance process depth both directly and
via the accounting provider. We include all control vari-
ables except for industry and country dummies. Figure 1
displays our results which we obtain from covariance-
based structural modeling (Bentler and Chou 1987).
We caution the readers to carefully interpret the results
since the overall model fit appears to be rather poor
(RMSEA = 0.193 and CFI = 0.339, respectively). Never-
theless, it is important to note that both the direct and the total
effects between sustainability performance and assurance
process depth are negative and significant. This additional
analysis alleviates potential concerns regarding the rela-
tionship between sustainability performance and assurance
process depth, but endogeneity problems cannot be ruled out
completely. In order to do so, panel data or an experimental
study would be necessary. Thus, it is necessary to
acknowledge that potential endogeneity concerns might
remain. Nevertheless, the overall results from the additional
analyses largely support the robustness of our findings.
Conclusions
This paper empirically investigates the relationships between
firm sustainability performance and the affiliation of the
assurance provider to the accounting profession and assurance
quality. We define assurance quality as the joint probability
that the assuror will discover and report problematic issues in
the client’s sustainability reporting system and distinguish
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance… 753

Table 9 Results of the robustness tests addressing potential bias due to the applied assurance standard
Non-accounting assurors (n = 22) Accounting assurors (n = 100) Total

Panel A: Contingency tables

ISAE 3000 = 0 17 (77%) 12 (12%) 29 (24%)
ISAE 3000 = 1 5 (23%) 88 (88%) 93 (73%)
Subtotal 22 (100%) 100 (100%) 122 (100%)
v2 = 42.40 p = 0.000
AA1000AS = 0 13 (59%) 79 (79%) 92 (75%)
AA1000AS = 1 9 (41%) 21 (21%) 30 (25%)
Subtotal 22 (100%) 100 (100%) 122 (100%)
v2 = 3.85 p = 0.050
(I) (II) (III) (IV) (V) (VI)
depth breadth depth breadth depth breadth

Panel B: Regression results with ISAE 3000 and AA1000AS as additional control variables
sustainability_performance H1a: ?; H1b: - -1.2077*** -0.7065 -0.7254* -0.0468 -0.7268* -0.0668
(-2.7962) (-0.9990) (-1.8218) (-0.0803) (-1.8023) (-0.1251)
accounting_provider H2a: ?; H2b: - 0.1160 -2.1391*** -0.4040* -1.3147*** -0.4177 -2.0372***
(0.3389) (-3.8184) (-1.7021) (-3.7816) (-1.3103) (-4.8275)
ISAE 3000 ? 0.0498 0.9770* 0.0181 1.3840***
(0.1655) (1.9840) (0.0646) (3.7228)
AA1000AS ? 1.6252*** 1.9407*** 1.6261*** 2.0855***
(7.4731) (6.0931) (7.3858) (7.1562)
controls Yes Yes Yes Yes Yes Yes
industry dummies Yes Yes Yes Yes Yes Yes
country dummies Yes Yes Yes Yes Yes Yes
observations 122 122 122 122 122 122
adjusted R2 0.5162 0.3245 0.5708 0.5042 0.5645 0.5743
F statistic 5.3039*** 2.9374*** 6.3632*** 5.1022*** 6.0593*** 6.2655***

(I) (II) (III) (IV) (V) (VI) (VII) (VIII)

depth1 depth2 depth3 breadth1 breadth2 breadth3 breadth4 breadth5

Panel C: Regression results for variations of the dependent variables

sustainability_performance -0.9096 *** -0.4380 -0.0499 -0.2414 -0.5376 -0.4214 -0.3250 -0.1646
(-2.6796) (-1.0584) (-0.1960) (-0.3700) (-0.8005) (-0.6867) (-0.5896) (-0.4152)
accounting_provider -0.1300 -0.0071 0.1283 -1.0907*** -1.3758*** -1.4171*** -1.0919*** -0.7443***
(-0.6357) (-0.0284) (0.8442) (-2.7750) (-3.4005) (-3.8334) (-3.2883) (-3.1163)
controls Yes Yes Yes Yes Yes Yes Yes Yes
industry dummies Yes Yes Yes Yes Yes Yes Yes Yes
country dummies Yes Yes Yes Yes Yes Yes Yes Yes
observations 122 122 122 122 122 122 122 122
adjusted R2 0.3344 0.2604 0.1543 0.3979 0.2917 0.2109 0.3339 0.2937
F statistic 3.0959*** 2.4691*** 1.7550*** 3.7575*** 2.7184*** 2.1151*** 3.0911*** 2.7352***

Panel A of the table contingency tables and the Pearson Chi square statistics and corresponding p values. Panel B of the table reports ordinary
least squares coefficient estimates and t statistics (in parentheses) based on Huber–White robust standard errors. Columns (I)–(VI) refer to model
specifications additionally controlling for the applied assurance standard. Panel C reports ordinary least squares coefficient estimates and
t statistics (in parentheses) based on Huber–White robust standard errors. Columns (I)–(VIII) present results based on an alternative measure for
depth and breadth, namely depth1 excluding D5, depth2 excluding D6, depth3 excluding D5 and D6, and breadth1 excluding B1, breadth2
excluding B4, breadth3 excluding B11, breadth4 excluding B13, and breadth5 excluding B4, B11, and B13
***, **, and *Statistical significance at the 1, 5, and 10% level, respectively (two-sided tests)

123
754
accounting
provider
sustainability -0.9280*
(-1.8723)
depth
performance
control
variables
Fig. 1 Results from structural equation modeling. This figure displays
the path coefficients and corresponding z statistics (in parentheses) for
the structural equation model. ***, **, and *statistical significance at
the 1, 5, and 10% level, respectively (two-sided tests)
assurance quality into assurance process depth—referring to
the discovering of issues—and assurance statement breadth—
referring to the reporting of issues. Assurance statement
breadth thus describes the extent of the assurance statement
and is measured based on the disclosure versus non-disclosure
of a list of minimum assurance statement elements which we
determine based on the assurance standards AA1000AS and
ISAE 3000. Assurance process depth in turn describes the
intensity of the assurance process and is measured based on
the content of those assurance statement elements that refer to
the process and conclusion of the assurance.
We hypothesize that firm sustainability performance is
related to assurance process depth, because firms negotiate
on the terms of the assurance engagement, which is reflected
by the depth of the assurance process. Affiliation to the
accounting profession is argued to be related to assurance
statement breadth, as it is the assurance provider that ulti-
mately writes and delivers the assurance statement. Since
existing theory and prior literature provide ambiguous
results, we have no clear expectations regarding the sign of
the relationships. Results from a sample of 122 European
companies reveal a negative relationship between firm sus-
tainability performance and assurance process depth. One
potential explanation for this finding stems from prior stud-
ies’ findings on the reasons for and against obtaining sus-
tainability assurance (Park and Brorson 2005; Edgley et al.
2010). Firms obtain external assurance to enhance their
credibility and improve their internal sustainability-related
systems and processes. Particularly poor sustainability per-
formers are in need of these improvements, and in-depth
assurance processes are more likely to result in these
improvements, which partly explains the negative relation-
ship. Superior sustainability performers, on the contrary,
obtain external assurance primarily to maintain their credi-
bility and legitimacy among stakeholders. They are not in
need of in-depth assurance processes to enhance their
123
K. Hummel et al.
sustainability systems and obtain less profound assurance
services due to cost–benefit considerations.
These significant findings are only obtained for assur-
ance process depth, but not for assurance statement
breadth, which further supports our reasoning. We find
further evidence for the importance of cost–benefit con-
siderations with respect to assurance engagements, as firm
financial performance is positively related to assurance
process depth. Moreover, the results do not hold for an
alternative measure of assurance process depth that
excludes the provision of recommendations. Once again,
this indicates that enhancements of the internal processes
and systems are a major reason for poor sustainability
performers to obtain in-depth assurance services. The
results from our study thus do not provide indications that
the assurance process has been ‘‘captured’’ by the man-
agement. This is to be seen positively from an ethical
perspective, as there are no indications for a managerial
attempt to positively distort the image of the company by
hiding critical information from the stakeholders.
With respect to our second hypothesis, we find a negative
relationship between the affiliation to the accounting provi-
der and assurance statement breadth. Our sample data thus
indicate that non-accounting assurance providers are asso-
ciated with higher assurance statement breadth, which might
result from a more specialized knowledge in non-financial
audit services. We perform a number of robustness tests to
investigate whether this finding is driven by the applied
assurance standard, since non-accounting assurors predom-
inantly apply the assurance standard ISAE 3000, which has a
generic focus and does not specifically address sustainability
reporting. While the results from these additional tests
indeed indicate that the applied assurance standard is cor-
related with assurance statement breadth, the negative rela-
tionship between accounting assuror and assurance
statement breadth still holds. Moreover, the negative rela-
tionship also persists for alternative measures of assurance
statement breadth that exclude those disclosure items that are
only mandatory according to AA1000AS. While we
acknowledge that our measure of assurance statement
breadth can be criticized for this bias towards the use of
AA1000AS, we provide a comprehensive measure for
assurance statement breadth. This measurement of assurance
statement breadth might thus come along with some quality
judgments on the governing assurance standards. However,
assurance providers in principle are free to apply both ISAE
3000 and AA1000AS to achieve assurance processes and
statements of higher quality.
Our findings and conclusions are moderated by certain
limitations. First, the sample is restricted to large listed
companies. Thus, we cannot account for other companies
that may receive less public attention and pursue different
legitimization strategies. In addition, companies that do not
The Role of Sustainability Performance and Accounting Assurors in Sustainability Assurance…
obtain external assurance are excluded from the sample,
which might bias our results. However, results from addi-
tional robustness tests provide no indication for such
sample selection bias. Furthermore, our sample is restricted
to countries from highly industrialized European countries,
and assurance practices may be different in other regions.
Second, data collection on both assurance process depth
and assurance statement breadth relies on information
contained in sustainability assurance statements, and this
information is assumed to be true and complete. Although
common assurance standards provide guidance on assur-
ance statement elements, latitude for interpretation and
discretionary decisions by the assurors and their clients
remains. Moreover, since there is currently no common
approach for measuring assurance quality, our measures of
assurance statement breadth and assurance process depth
can be criticized for including/excluding certain assurance
statement elements from our measures. We try to mitigate
this criticism by focusing on a minimum list of assurance
statement elements which are—except for four elements—
specified by the two leading sustainability assurance stan-
dards. Besides, our measure of assurance process depth is
closely related to insights provided by prior case-based
research. In addition, we perform several robustness tests to
investigate these concerns and provide further insights into
the data. Third, the affiliation to the accounting profession
is a binary variable that is determined based on the assur-
ance company. Thus, we cannot account for the possibility
of multidisciplinary teams, which (Huggins et al. 2011)
argue to be most beneficial in certain assurance contexts.
Fourth, our data are limited to a single reporting year and
we thus cannot completely rule out the possibility that the
relationship between sustainability performance and
assurance quality may be endogenous.
The limitations of our study indicate the potential for
future research. First, we strongly encourage researchers to
apply our measures for assurance process depth and
assurance statement breadth to firms domiciled in other
countries as well as to non-listed companies. In particular,
the assurance practices of small- and medium-sized enter-
prises are still a blank spot on the research map. It could
Table 10 Correlation statistics
(1) (2) (3) (4)
(1) 1.0000
(2) 0.6974 1.0000
(0.0000)
(3) -0.1672 -0.1286 1.0000
(0.0657) (0.1580)
(4) -0.1371 -0.1793 -0.0561 1.0000
(0.1321) (0.0482) (0.5393)
755
also be worthwhile to examine differences in assurance
quality across countries and over a longer reporting period,
which would generate valuable insights into the potential
impact of the institutional environment and time trends.
Moreover, potential endogeneity concerns regarding the
relationship between sustainability performance and assur-
ance process depth could also be mitigated by using lagged
variables and panel data. Second, a closer investigation of
the negotiations between the client firm and the assurance
provider on the terms of the assurance engagement is a vital
avenue for future research. To the best of our knowledge,
there are no studies on this phase yet, although the results
from our study provide some indication that firms try to
influence the assurance engagement during these negotia-
tions. Therefore, future research could provide deeper
insights into this stage of the assurance engagement, pos-
sibly based on interviews. Such a research design also
allows to investigate the composition of the assurance teams
more thoroughly and the process of how the auditor is
chosen and which criteria are used in the selection phase.
Interviews and case studies could also serve to investigate
the motives that drive companies to seek assurance and the
goals they pursue by obtaining it, and thus deliver further
insights into the existence of managerial capture and the
negative ethical implications connected to it. From an eth-
ical perspective, it would also be interesting to examine how
well the assurance process works with regard to assessing
the ethical performance of the companies audited. Due to
the complexity of measuring and observing ethical behavior
(Oz 2001), this provides a particular challenge. Overall,
there are manifold opportunities for research on sustain-
ability assurance, as it still is a rather unexplored field.
Compliance with ethical standards
Conflict of interest The authors declare that they have no conflict of
interests.
Appendix
See Table 10.
(5) (6) (7) (8)
123
756 K. Hummel et al.

Table 10 continued
(1) (2) (3) (4) (5) (6) (7) (8)

(5) 0.0759 0.1333 0.0981 -0.0754 1.0000

(0.4061) (0.1432) (0.2825) (0.4093)
(6) 0.1217 0.0507 0.0372 0.2799 0.3357 1.0000
(0.1818) (0.5794) (0.6841) (0.0018) (0.0002)
(7) -0.0323 -0.0996 -0.1165 0.1802 0.1838 0.0000 1.0000
(0.7239) (0.2753) (0.2013) (0.0471) (0.0427) (0.9998)
(8) 0.1743 0.2152 -0.0218 -0.1565 -0.0239 -0.1417 -0.0571 1.0000
(0.0548) (0.0173) (0.8116) (0.0851) (0.7938) (0.1194) (0.5324)
The table presents bivariate Pearson correlation coefficients and p values (in parentheses) for a two-tailed test of statistical significance for the
variables used in the regression analysis. (1) refers to breadth, (2) refers to depth, (3) refers to sustainability_performance, (4) refers to
accounting_provider, (5) refers to financial_performance, (6) refers to size, (7) refers to leverage, and (8) refers to provider_independence.
Statistics are presented for the full sample of 122 firms

Deegan, C., Cooper, B. J., & Shelly, M. (2006). An investigation of

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