IDEAS home Printed from https://ideas.repec.org/a/eee/bracre/v54y2022i1s0890838921000287.html
   My bibliography  Save this article

Stakeholders’ perceptions of factors affecting the credibility of sustainability reports

Author

Listed:
  • Xiao, Xinning
  • Shailer, Greg

Abstract

This study investigates factors affecting the credibility of sustainability reporting. Potential factors were first identified from prior studies and then refined through semi-structured interviews with sustainability reporting stakeholders including users, preparers, assurance providers and standard-setters. From this we construct a conceptual framework containing 26 variables that potentially influence credibility assessments of sustainability reports. This large set of variables is then evaluated by using a questionnaire survey of different stakeholder groups. The responses reveal that some source credibility variables (trustworthiness, track record and management expertise), assurance-related variables, and message characteristics (materiality and completeness of sustainability disclosures) are perceived by different stakeholder groups as particularly important to the credibility assessment, with source credibility factors dominating the rankings. An exploratory factor analysis shows that perceptions coalesce on four factors that are concerned with assurance and accountability, source (management) characteristics, message characteristics, and standards & ratings, with the structure of first two being dominated by the variables ranked as most important. The rank analysis also reveals significant differences between users and preparers in the ordering of influential credibility factors, and this is further supported by the significant differences between users’ and preparers’ mean scores for the ‘assurance and accountability’ and ‘source (management) characteristics’ factors.

Suggested Citation

  • Xiao, Xinning & Shailer, Greg, 2022. "Stakeholders’ perceptions of factors affecting the credibility of sustainability reports," The British Accounting Review, Elsevier, vol. 54(1).
    • Handle: RePEc:eee:bracre:v:54:y:2022:i:1:s0890838921000287
    DOI: 10.1016/j.bar.2021.101002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0890838921000287
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.bar.2021.101002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hronsky, Jane J. F. & Houghton, Keith A., 2001. "The meaning of a defined accounting concept: regulatory changes and the effect on auditor decision making," Accounting, Organizations and Society, Elsevier, vol. 26(2), pages 123-139, March.
    2. Carla Rhianon Edgley & Michael John Jones & Jill Frances Solomon, 2010. "Stakeholder inclusivity in social and environmental report assurance," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(4), pages 532-557, May.
    3. J. Vanhamme & B. Grobben, 2009. "Too good to be true ! : the effectiveness of CSR History in Countering Negative Publicity," Post-Print hal-00581630, HAL.
    4. Carl‐Johan Hedberg & Fredrik von Malmborg, 2003. "The Global Reporting Initiative and corporate sustainability reporting in Swedish companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 10(3), pages 153-164, September.
    5. Dholakia, Ruby Roy & Sternthal, Brian, 1977. "Highly Credible," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 3(4), pages 223-232, March.
    6. de Villiers, Charl & van Staden, Chris J., 2010. "Shareholders’ requirements for corporate environmental disclosures: A cross country comparison," The British Accounting Review, Elsevier, vol. 42(4), pages 227-240.
    7. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton, 2019. "Professionalizing the assurance of sustainability reports: the auditors’ perspective," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 33(2), pages 309-334, November.
    8. Christopher Marquis & Michael W. Toffel & Yanhua Zhou, 2016. "Scrutiny, Norms, and Selective Disclosure: A Global Study of Greenwashing," Organization Science, INFORMS, vol. 27(2), pages 483-504, April.
    9. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    10. Traci Hong, 2006. "The influence of structural and message features on Web site credibility," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 57(1), pages 114-127, January.
    11. Armando Calabrese & Roberta Costa & Francesco Rosati, 2015. "A feedback-based model for CSR assessment and materiality analysis," Accounting Forum, Taylor & Francis Journals, vol. 39(4), pages 312-327, December.
    12. Houghton, Keith A., 1988. "The measurement of meaning in accounting: A critical analysis of the principal evidence," Accounting, Organizations and Society, Elsevier, vol. 13(3), pages 263-280, April.
    13. Hsu, Hsuan Yu & Tsou, Hung-Tai, 2011. "Understanding customer experiences in online blog environments," International Journal of Information Management, Elsevier, vol. 31(6), pages 510-523.
    14. Michael John Jones & Jill Frances Solomon, 2010. "Social and environmental report assurance: Some interview evidence," Accounting Forum, Taylor & Francis Journals, vol. 34(1), pages 20-31, March.
    15. Jones, Michael John & Solomon, Jill Frances, 2010. "Social and environmental report assurance: Some interview evidence," Accounting forum, Elsevier, vol. 34(1), pages 20-31.
    16. Dominique Diouf & Olivier Boiral, 2017. "The quality of sustainability reports and impression management," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 30(3), pages 643-667, March.
    17. O. W. Phelps, 1942. "A Theory of Business Communication," The Journal of Business, University of Chicago Press, vol. 15, pages 343-343.
    18. Susanne Arvidsson, 2010. "Communication of Corporate Social Responsibility: A Study of the Views of Management Teams in Large Companies," Journal of Business Ethics, Springer, vol. 96(3), pages 339-354, October.
    19. Philip R. Beaulieu, 1994. "Commercial Lenders' Use of Accounting Information in Interaction with Source Credibility," Contemporary Accounting Research, John Wiley & Sons, vol. 10(2), pages 557-585, March.
    20. Azlan Amran & Shiau Ping Lee & S. Susela Devi, 2014. "The Influence of Governance Structure and Strategic Corporate Social Responsibility Toward Sustainability Reporting Quality," Business Strategy and the Environment, Wiley Blackwell, vol. 23(4), pages 217-235, May.
    21. Ans Kolk & Paolo Perego, 2010. "Determinants of the adoption of sustainability assurance statements: an international investigation," Business Strategy and the Environment, Wiley Blackwell, vol. 19(3), pages 182-198, March.
    22. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton, 2019. "Assessing and Improving the Quality of Sustainability Reports: The Auditors’ Perspective," Journal of Business Ethics, Springer, vol. 155(3), pages 703-721, March.
    23. O'Dwyer, Brendan & Owen, David L., 2005. "Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation," The British Accounting Review, Elsevier, vol. 37(2), pages 205-229.
    24. Charl de Villiers & Leonardo Rinaldi & Jeffrey Unerman, 2014. "Integrated Reporting: Insights, gaps and an agenda for future research," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 27(7), pages 1042-1067, August.
    25. José V. Frias‐Aceituno & Lázaro Rodríguez‐Ariza & Isabel M. Garcia‐Sánchez, 2014. "Explanatory Factors of Integrated Sustainability and Financial Reporting," Business Strategy and the Environment, Wiley Blackwell, vol. 23(1), pages 56-72, January.
    26. Maroun, Warren, 2017. "Assuring the integrated report: Insights and recommendations from auditors and preparers," The British Accounting Review, Elsevier, vol. 49(3), pages 329-346.
    27. Alford, Aw, 1992. "The Effect Of The Set Of Comparable Firms On The Accuracy Of The Price Earnings Valuation Method," Journal of Accounting Research, Wiley Blackwell, vol. 30(1), pages 94-108.
    28. Muhammad Bilal Farooq & Charl de Villiers, 2019. "How sustainability assurance engagement scopes are determined, and its impact on capture and credibility enhancement," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 33(2), pages 417-445, December.
    29. O'Dwyer, Brendan & Owen, David & Unerman, Jeffrey, 2011. "Seeking legitimacy for new assurance forms: The case of assurance on sustainability reporting," Accounting, Organizations and Society, Elsevier, vol. 36(1), pages 31-52, January.
    30. Samantha Miles & Kate Ringham, 2019. "The boundary of sustainability reporting: evidence from the FTSE100," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 33(2), pages 357-390, December.
    31. Watts, Ross L & Zimmerman, Jerold L, 1983. "Agency Problems, Auditing, and the Theory of the Firm: Some Evidence," Journal of Law and Economics, University of Chicago Press, vol. 26(3), pages 613-633, October.
    32. Fullerton, Rosemary R. & McWatters, Cheryl S., 2002. "The role of performance measures and incentive systems in relation to the degree of JIT implementation," Accounting, Organizations and Society, Elsevier, vol. 27(8), pages 711-735, November.
    33. Brendan O'Dwyer & Jeffrey Unerman & Elaine Hession, 2005. "User needs in sustainability reporting: Perspectives of stakeholders in Ireland," European Accounting Review, Taylor & Francis Journals, vol. 14(4), pages 759-787.
    34. Hirst, De & Koonce, L & Simko, Pj, 1995. "Investor Reactions To Financial Analysts Research Reports," Journal of Accounting Research, Wiley Blackwell, vol. 33(2), pages 335-351.
    35. Kristy Hodge & Nava Subramaniam & Jenny Stewart, 2009. "Assurance of Sustainability Reports: Impact on Report Users' Confidence and Perceptions of Information Credibility," Australian Accounting Review, CPA Australia, vol. 19(3), pages 178-194, September.
    36. C. Nadine Wathen & Jacquelyn Burkell, 2002. "Believe it or not: Factors influencing credibility on the Web," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 53(2), pages 134-144.
    37. Stone, Dan N. & Hunton, James E. & Wier, Benson, 2000. "Succeeding in managerial accounting. Part 1: knowledge, ability, and rank," Accounting, Organizations and Society, Elsevier, vol. 25(7), pages 697-715, October.
    38. Robyn Moroney & Carolyn Windsor & Yong Ting Aw, 2012. "Evidence of assurance enhancing the quality of voluntary environmental disclosures: an empirical analysis," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 52(3), pages 903-939, September.
    39. George Serafeim, 2015. "Integrated Reporting and Investor Clientele," Journal of Applied Corporate Finance, Morgan Stanley, vol. 27(2), pages 34-51, June.
    40. Charika Channuntapipat & Anna Samsonova-Taddei & Stuart Turley, 2019. "Exploring diversity in sustainability assurance practice," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 32(2), pages 556-580, March.
    41. Jonas Wanner & Christian Janiesch, 2019. "Big data analytics in sustainability reports: an analysis based on the perceived credibility of corporate published information," Business Research, Springer;German Academic Association for Business Research, vol. 12(1), pages 143-173, April.
    42. Clarkson, Peter M. & Li, Yue & Richardson, Gordon D. & Vasvari, Florin P., 2008. "Revisiting the relation between environmental performance and environmental disclosure: An empirical analysis," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 303-327.
    43. Joëlle Vanhamme & Bas Grobben, 2009. "“Too Good to be True!”. The Effectiveness of CSR History in Countering Negative Publicity," Journal of Business Ethics, Springer, vol. 85(2), pages 273-283, April.
    44. Crawford Spence, 2009. "Social and environmental reporting and the corporate ego," Business Strategy and the Environment, Wiley Blackwell, vol. 18(4), pages 254-265, May.
    45. Lauren Danastas & David Gadenne, 2006. "SOCIAL AND ENVIRONMENTAL NGOsAS USERS OF CORPORATE SOCIAL DISCLOSURE," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 85-102.
    46. Alberto Fonseca, 2010. "How credible are mining corporations' sustainability reports? a critical analysis of external assurance under the requirements of the international council on mining and metals," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 17(6), pages 355-370, November.
    47. Hamilton, Re & Wright, Wf, 1982. "Internal Control Judgments And Effects Of Experience - Replications And Extensions," Journal of Accounting Research, Wiley Blackwell, vol. 20(2), pages 756-765.
    48. Healy, Paul M. & Palepu, Krishna G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 405-440, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nadia Gulko & Catriona Hyde, 2022. "Corporate perspectives on CSR disclosure: audience, materiality, motivations," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 19(4), pages 389-412, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Warren Maroun, 2020. "A Conceptual Model for Understanding Corporate Social Responsibility Assurance Practice," Journal of Business Ethics, Springer, vol. 161(1), pages 187-209, January.
    2. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton & Julie Bernard, 2019. "Ethical Issues in the Assurance of Sustainability Reports: Perspectives from Assurance Providers," Journal of Business Ethics, Springer, vol. 159(4), pages 1111-1125, November.
    3. Lopin Kuo & Po-Wen Kuo & Chun-Chih Chen, 2021. "Mandatory CSR Disclosure, CSR Assurance, and the Cost of Debt Capital: Evidence from Taiwan," Sustainability, MDPI, vol. 13(4), pages 1-19, February.
    4. Vaz Ogando, Natalia & Ruiz Blanco, Silvia & Fernandez-Feijoo Souto, Belen, 2018. "El mercado de verificación de las memorias de sostenibilidad en España: un análisis desde la perspectiva de la demanda," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 21(1), pages 48-62.
    5. Habiba Al‐Shaer & Mahbub Zaman, 2018. "Credibility of sustainability reports: The contribution of audit committees," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 973-986, November.
    6. Le Luo & Qingliang Tang & Hanlu Fan & Jamie Ayers, 2023. "Corporate carbon assurance and the quality of carbon disclosure," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(1), pages 657-690, March.
    7. Jannik Gerwanski & Othar Kordsachia & Patrick Velte, 2019. "Determinants of materiality disclosure quality in integrated reporting: Empirical evidence from an international setting," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 750-770, July.
    8. Olivier Boiral & Iñaki Heras-Saizarbitoria & Marie-Christine Brotherton, 2019. "Assessing and Improving the Quality of Sustainability Reports: The Auditors’ Perspective," Journal of Business Ethics, Springer, vol. 155(3), pages 703-721, March.
    9. Genevé Richard & Elza Odendaal, 2020. "Integrated reporting assurance practices—a study of South African firms," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(4), pages 245-266, December.
    10. Diogenis Baboukardos & Musa Mangena & Abdullahi Ishola, 2021. "Integrated thinking and sustainability reporting assurance: International evidence," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1580-1597, May.
    11. Teresa Eugénio & Sónia Gomes & Manuel Castelo Branco & Ana Isabel Morais, 2022. "Non-Financial Reporting and Assurance: A New Opportunity for Auditors? Evidence from Portugal," Sustainability, MDPI, vol. 14(20), pages 1-15, October.
    12. Tobias Gerwing & Peter Kajüter & Maximilian Wirth, 2022. "The role of sustainable corporate governance in mandatory sustainability reporting quality," Journal of Business Economics, Springer, vol. 92(3), pages 517-555, April.
    13. Charika Channuntapipat, 2021. "Can sustainability report assurance be a collaborative process and practice beyond the ritual of verification?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 775-786, February.
    14. Martínez-Ferrero, Jennifer & García-Sánchez, Isabel-María, 2017. "Coercive, normative and mimetic isomorphism as determinants of the voluntary assurance of sustainability reports," International Business Review, Elsevier, vol. 26(1), pages 102-118.
    15. Carmelo Reverte, 2021. "Do investors value the voluntary assurance of sustainability information? Evidence from the Spanish stock market," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(5), pages 793-809, September.
    16. Stutz, Adrian & Schell, Sabrina & Hack, Andreas, 2022. "In family firms we trust – Experimental evidence on the credibility of sustainability reporting: A replication study with extension," Journal of Family Business Strategy, Elsevier, vol. 13(4).
    17. Geert Braam & Roy Peeters, 2018. "Corporate Sustainability Performance and Assurance on Sustainability Reports: Diffusion of Accounting Practices in the Realm of Sustainable Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(2), pages 164-181, March.
    18. Bradbury, Michael & Jia, Jing & Li, Zhongtian, 2022. "Corporate social responsibility committees and the use of corporate social responsibility assurance services," Journal of Contemporary Accounting and Economics, Elsevier, vol. 18(2).
    19. Isabel‐María García‐Sánchez, 2020. "Drivers of the CSR report assurance quality: Credibility and consistency for stakeholder engagement," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2530-2547, November.
    20. Olivier Boiral & Marie‐Christine Brotherton & Léo Rivaud & David Talbot, 2022. "Comparing the uncomparable? An investigation of car manufacturers' climate performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2213-2229, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:bracre:v:54:y:2022:i:1:s0890838921000287. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/the-british-accounting-review .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.