Abstract:
Purpose– The purpose of this study is to examine firm-specific characteristics that influence firms’ choice of assurance provider in sustainability assurance. The market for sustainability assurance consists of three types: accounting firms (particularly the Big 4 firms), nonaccounting specialist consulting firms (who specialise only in sustainability issues), and nonaccounting general consulting firms (who provide general advisory/consulting services). Design/methodology/approach – Using a sample selected from the top 100 publicly listed companies in the UK and US respectively that published a sustainability report in 2010 and 2011 for which assurance was obtained, a multinomial logistic regression model is applied by regressing the 3 types of assurance providers on firm size, leverage, profit, liquidity, percentage of strategic shareholding, and two control variables, country and year. Findings – Our results indicate that the choice of sustainability assurance provider is related to firm size, profitability, liquidity, and country. Research limitations/implications – There may be relevant variables omitted from the empirical analysis; results of this study may not be able to be generalized beyond the sample selected; and the sample size is relatively small. Practical implications – Sustainability assurance is a viable assurance service that the accounting profession can provide. Originality/value – This study helps in identifying the types of firms that are likely to demand assurance services provided by accounting firms.
