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A snapshot of sustainability assurance market in New Zealand

A snapshot of sustainability assurance market in New Zealand This study aims to provide a snapshot of voluntary sustainability assurance in New Zealand (NZ) in 2020. we assess the frequency of different assurance elements and discuss aspects of current practices that potentially contribute to the audit expectation gap. we also test whether the determinants of voluntary sustainability assurance in NZ are consistent with international findings.Design/methodology/approachFor 118 companies listed on the New Zealand Stock Exchange in 2020, we hand collected data on whether sustainability information was assured, subject matter assured, assurance level, outcome, provider, disclosure of detailed procedures, standard referenced and criteria applied. we then examine the influences of voluntary sustainability assurance using both univariate and regression analysis.FindingsApproximately 20% of listed companies that disclosed sustainability information provide a sustainability assurance report, indicating low levels of assurance compared to international practices. we note that the presence of different forms of assurance and certification, placement of sustainability information before financial statements and the associated audit report and mixture of assurance levels potentially contribute to the audit expectation gap. Further, voluntary sustainability assurance practices are diverse, and there are notable differences between Big Four accounting firms and other providers in terms of assurance level and standard referenced. Consistent with prior studies, we find size and industry classification as two main drivers of voluntary sustainability assurance.Originality/valueWe contribute NZ-specific insights to the sustainability assurance literature. The findings on voluntary sustainability assurance practices and reflection on the audit expectation gap are timely and relevant to the new climate-related disclosure mandate and pending assurance requirements. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Pacific Accounting Review Emerald Publishing

A snapshot of sustainability assurance market in New Zealand

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0114-0582
eISSN
0114-0582
DOI
10.1108/par-08-2021-0142
Publisher site
See Article on Publisher Site

Abstract

This study aims to provide a snapshot of voluntary sustainability assurance in New Zealand (NZ) in 2020. we assess the frequency of different assurance elements and discuss aspects of current practices that potentially contribute to the audit expectation gap. we also test whether the determinants of voluntary sustainability assurance in NZ are consistent with international findings.Design/methodology/approachFor 118 companies listed on the New Zealand Stock Exchange in 2020, we hand collected data on whether sustainability information was assured, subject matter assured, assurance level, outcome, provider, disclosure of detailed procedures, standard referenced and criteria applied. we then examine the influences of voluntary sustainability assurance using both univariate and regression analysis.FindingsApproximately 20% of listed companies that disclosed sustainability information provide a sustainability assurance report, indicating low levels of assurance compared to international practices. we note that the presence of different forms of assurance and certification, placement of sustainability information before financial statements and the associated audit report and mixture of assurance levels potentially contribute to the audit expectation gap. Further, voluntary sustainability assurance practices are diverse, and there are notable differences between Big Four accounting firms and other providers in terms of assurance level and standard referenced. Consistent with prior studies, we find size and industry classification as two main drivers of voluntary sustainability assurance.Originality/valueWe contribute NZ-specific insights to the sustainability assurance literature. The findings on voluntary sustainability assurance practices and reflection on the audit expectation gap are timely and relevant to the new climate-related disclosure mandate and pending assurance requirements.

Journal

Pacific Accounting Review – Emerald Publishing

Published: Sep 23, 2022

Keywords: Sustainability assurance; ISO 14064; ISAE 3000; ISAE 3410; New Zealand; Sustainability reporting; Other assurance services

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