Special issue information:

In recent times, investors, regulators, and other stakeholders have started looking beyond the traditional financial information from corporations for their decision-making. In response, companies have begun providing a range of non-financial information. Despite significant growth in sustainability reporting practices and increasing regulatory focus on these reports, one big concern is “the quality” of the information disclosed in those reports. Large-scale, multi-focused investigations of the reliability and the social utility of the sustainability assurance reports’ reliability and social utility remains an under-researched area in the accounting literature. In this special issue, we invite scholars and researchers to provide evidence on the quality of sustainability assurance reporting using a range of research methods and institutional settings.

Guest Editors 

Gerald Lobo, University of Houston, USAEmail: gjlobo@uh.edu

Swarnodeep Homroy, University of Groningen, The Netherlands Email: s.homroy@rug.nl (Corresponding guest editor)

Yasemin Zengin-Karaibrahimoğlu, University of Groningen
Email: y.karaibrahimoglu@rug.nl

Rationale and Scope

The practice of sustainability reporting has a long history, and in today’s business world, it has been a necessity, rather than a preference, for all corporations. Last two decades, corporations are embraced a strong call from investors, regulators, and other stakeholders for enhanced transparency in reporting about the operations of publicly listed corporations that goes beyond the traditional financial information. In response to these calls, corporations have started providing a range of non-financial information (Maroun, 2017; Moser and Martin, 2012), covering various social and environmental issues associated with their operations (e.g., impact on the climate, societal consequences, natural resource extraction and employee relations, etc.).

Despite significant growth in sustainability reporting practices and increasing regulatory focus on these reports, one big concern is “the quality” of the information disclosed in those reports. These concerns stem from lack of standardization in the reporting process, the absence of stakeholder involvement, and these disclosures (particularly when done voluntarily) are used as an advertising tool (Cho et al., 2015, Cho et al., 2018). Corporate sustainability reports are often long and contain complex information on multiple parameters (Boiral and Henri, 2017). Therefore, non-financial reporting may not necessarily reflect the true nature of corporate sustainability practices and guarantee stakeholders’ confidence.

Companies that aim to enhance their corporate reputation and credibility are more likely to have their sustainability reports assured by an assurance provider, and companies operating in stakeholder-oriented countries tend to choose more audit firms for assurance of sustainability reports (Simnett, Vanstraelen, and Chua 2009). A sub-industry of assurance intermediaries has emerged to reduce the information asymmetry between the firms and the stakeholders. These assurance providers use independent experts to verify the reliability and credibility of corporate disclosures on non-financial aspects (O’Dwyer et al., 2011). Parallel to the audit reports on financial matters, the sustainability assurance statements aim to provide an independent appraisal to the stakeholders that the information released in sustainability reports is reliable, material, and complete (Gilbert and Rasche, 2008).

A thorough and multi-disciplinary examination of the sustainability assurance reporting practices is crucial to non-financial accounting for several reasons. First, corporate sustainability information is increasingly salient for financial and non-financial stakeholders alike. Socially responsible investing has been growing in modern times, and corporations are using climate-related financing tools to raise funds from the market (Eccles, Ioannou, and Serafiem, 2014; Cruz, 2020; Hirtenstein, 2016). For continuing or increasing the funding of sustainability initiatives, the financial market needs reliable information on corporate sustainability through assurance mechanisms (Wong and Millington, 2014).

Second, while the financial accounting reporting practices have been harmonized across the major countries over the years, it is not yet the case for sustainability reporting. Additionally, sustainability is a multi-dimensional issue. In such cases, when the information environment is complex, stakeholders are known to benefit from independent appraisal (Dass, Kini, Nanda, Onal, and Wang, 2014; Coles, Daniel, and Naveen, 2008). However, currently, there is little evidence on whether third-party assurance on sustainability reports adds value.

Finally, there is very little evidence on the reliability of sustainability assurance practices, offered predominantly by accounting and consulting firms (O’Dwyer and Owen, 2005; O’Dwyer, 2011; Power, 1997). Earlier studies have criticized these assurance services’ “rubber-stamping” nature (O’Dwyer and Owen, 2005). More recent studies provide a more nuanced view of this sub-industry (Perego and Kolk, 2012). Large-scale, multi-focused investigations of the reliability and the social utility of the sustainability assurance reports’ reliability and social utility remains an under-researched area in the accounting literature.

In this special issue, we invite scholars and researchers to provide evidence on the quality of sustainability assurance reporting using a range of research methods and institutional settings. Therefore, submissions from a wide range of theoretical, methodological, and empirical approaches are welcome as long as they are in the spirit of the special issue’s theme. Suggested research questions include, but is not limited to:
⎯ Is high-quality sustainability reporting assurance relevant for capital market participants’ decision-making?
⎯ Does assurance on suitability reporting provide credibility in the substance or form?
⎯ What are the benefits of having high-quality sustainability reporting assurance for firms?
⎯ Do firm-specific factors (corporate governance structure, top management characteristics, ownership structure, and stakeholder attention) affect the quality of sustainability reporting assurance?
⎯ Does the presence of service providers other than Big-4 (increased market competition) improve or compromise the quality sustainability reporting assurance?
⎯ How does assurance providers’ characteristics (reputation, tenure, expertise in sustainability, independence, competencies, composition of the assurance engagement team) affect the quality of sustainability reporting assurance?
⎯ What are the main competencies required for assurance providers/assurance engagement teams in the assurance of sustainability reporting?⎯ Is there a cross-country difference in the quality of sustainability reporting assurance?
⎯ What are the best assurance approaches for higher quality sustainability reporting?

Manuscript submission information:

Submissions

Authors of fully developed and high-quality papers are encouraged to submit to the special issue of British Accounting Review (BAR). The British Accounting Review is the official journal of the British Accounting and Finance Association and has a CiteScore of 7 and an Impact Factor of 5.577. This ranks the journal in the top 2 and 3 respectively among accounting journals as well as 7 in accounting and finance. It’s rated A* in ABDC Journal Quality Guide and is rated 3 on the ABS list.

BAR has a rejection rate of 94%. Therefore, all papers in the Special Issue must have an original contribution and meet the publishing quality standard of the journal. Each paper will be judged according to the highest international standards within its topic area, the originality of its contribution, its relevance to development of the subject and its quality of exposition. All papers are subject to a minimum of double-blind refereeing.
Full paper submissions must follow the journal guidelines. All submissions will be subject to an initial screening by the Guest editors of the special issue. Papers that fall outside the scope of the special issue or are considered unlikely to meet the quality threshold of the special issue will be desk rejected. All manuscripts considered for inclusion in the special issue will be subject to a double-blind review process and must be submitted via the journal website. The Joint Editors of the British Accounting Review will oversee the final set of accepted papers prior to publication. It is anticipated that the special issue will be published in 2024.

The closing date for submissions to this special issue is 31 January 2023.