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Carbon accounting quality: Measurement and the role of assurance

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  • Gipper, Brandon
  • Sequeira, Fiona
  • Shi, Shawn X.

Abstract

We examine whether external assurance improves the quality of firms' carbon accounting. We develop a measure of carbon accounting quality based on the deviation of reported emissions from a model-based expected level and supplement it with two survey-based measures. We show that assurance is associated with higher carbon accounting quality. This association is stronger when firms have weaker pre-existing carbon accounting systems and when assurance is more thorough. Consistent with assurance enhancing quality, assurance relates to the identification of issues in a firm's carbon accounting system, along with fewer omissions and more revisions of prior disclosures. Exploiting mandated assurance for non-financial reporting in three E.U. countries, we show that firms experience post-regulation increases in carbon accounting quality. Together, the findings highlight the importance of assurance for reporting firms that are improving their carbon accounting quality.

Suggested Citation

  • Gipper, Brandon & Sequeira, Fiona & Shi, Shawn X., 2026. "Carbon accounting quality: Measurement and the role of assurance," Journal of Accounting and Economics, Elsevier, vol. 81(2).
    • Handle: RePEc:eee:jaecon:v:81:y:2026:i:2:s0165410125000850
    DOI: 10.1016/j.jacceco.2025.101849
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    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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