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How Does Combined Assurance Affect the Reliability of Integrated Reports and Investors’ Judgments?

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  • Hien Hoang
  • Soon-Yeow Phang

Abstract

As integrated reports evolve to meet the needs of stakeholders, it is increasingly important to establish reliable information. We examine the effect of a new technique to enhance the reporting reliability, referred to as ‘combined assurance’ (through which the audit committee coordinates the assurance roles of management, internal assurance and external assurance providers and concludes on the effectiveness of risk management, internal controls and reporting quality), on restoring investors’ willingness to invest when there are significant reporting reliability risks. We conduct a series of experiments with different operationalizations of reporting reliability risks. We find that the communication of combined assurance can restore investors’ perceived reliability of reported information and willingness to invest when there is bad news (Experiment 1); when there is a non-financial key audit matter (KAM) indicating estimation uncertainty in the non-financial information (Experiment 2); and when there is a financial KAM indicating risks of manipulated financial reporting (Experiment 3). Our study has implications for practitioners, standard setters, and regulators who are exploring possible mechanisms to enhance the reliability of financial and non-financial information in the integrated reports.

Suggested Citation

  • Hien Hoang & Soon-Yeow Phang, 2021. "How Does Combined Assurance Affect the Reliability of Integrated Reports and Investors’ Judgments?," European Accounting Review, Taylor & Francis Journals, vol. 30(1), pages 175-195, January.
    • Handle: RePEc:taf:euract:v:30:y:2021:i:1:p:175-195
    DOI: 10.1080/09638180.2020.1745659
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    Citations

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    Cited by:

    1. Amir Hossain & Sudipta Bose & Abul Shamsuddin, 2023. "Diffusion of integrated reporting, insights and potential avenues for future research," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 2503-2555, June.
    2. Vasilii Erokhin & Alexey Bobryshev & Gao Tianming & Nelly Agafonova & Marina Sidorova & Natalya Malinovskaya & Nina Zargaryan, 2025. "Determining the Composition of Integrated Reporting Indicators Under Uncertainty: The Innovation-Based Convergence of Economic, Managerial, Social, and Environmental Contexts," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(3), pages 13393-13428, September.
    3. Wei Chen & Kerry A. Humphreys & Ken T. Trotman, 2026. "The Effect of the Level of Sustainability Assurance on Investor Judgements," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 66(1), pages 904-916, March.
    4. Wang, Qi & Zhang, Lin & Ma, Qianqun & Wu, Chong, 2024. "The impact of financial risk on boilerplate of key audit matters: Evidence from China," Research in International Business and Finance, Elsevier, vol. 70(PB).
    5. Mesirin Kwanjai & Sampan Nettayanun, 2025. "Sentiment and Tone Analysis of Corporate Communication in Different Market Conditions," SAGE Open, , vol. 15(3), pages 21582440251, August.
    6. Hien Hoang & Robyn Moroney & Soon‐Yeow Phang & Xinning Xiao, 2023. "Investor reactions to key audit matters: Financial and non‐financial contexts," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(3), pages 3325-3349, September.
    7. Khemani, Purnima & Kumar, Dilip, 2025. "Do opposites attract? Understanding the influence of infographics and message credibility on investor perceptions and decision-making," Journal of Business Research, Elsevier, vol. 200(C).
    8. Xiaolan Yang & Wenting Meng & Shu Chen, 2025. "Do images help? The impact of proenvironment photographs and graphs in environmental disclosures on investor perceptions and willingness to invest," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 203-217, January.
    9. Oleksandr Sherstiuk & Tetiana Demianenko, 2023. "Integrated Reporting in the Context of Information Support of Business Analysis," Oblik i finansi, Institute of Accounting and Finance, issue 4, pages 39-46, December.
    10. Oleksandr Sherstiuk, 2024. "Methodical Aspects of the Integrated Reporting Preparation," Oblik i finansi, Institute of Accounting and Finance, issue 1, pages 22-27, March.
    11. Teresa Izzo & Antonella Russo & Gianluca Risaliti, 2025. "Integrated Reporting, Stakeholders' Perspective and Sustainable Disclosure: Systematic Insights From Empirical Research," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(4), pages 4978-5005, July.
    12. Boyle, Erik S. & Mintchik, Natalia & Warne, Rick C., 2023. "When it pays to be a friend: Investigating nonprofessional investors' judgments toward CSR companies following an accounting restatement," Advances in accounting, Elsevier, vol. 60(C).
    13. Paul Sakchuenyos & Eka Nugraha Tan & Pei‐Jia Lum & Roger Simnett, 2026. "The Impacts of Disclosing Internal Controls, Board Oversight and Assurance by Different Types of External Assurers on Investors' Use of Sustainability Information," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 66(1), pages 887-903, March.
    14. Shu Chen & Jiaqi Wang & Xiaolan Yang, 2026. "Pure Altruism or Warm-Glow Altruism? Altruistic Motivation and Gender Differences in Socially Responsible Investment," Journal of Business Ethics, Springer, vol. 204(1), pages 127-144, February.

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