Article ID Journal Published Year Pages File Type
5106951 International Business Review 2017 16 Pages PDF
Abstract

•The disclosure of sustainability information alone is not sufficient in reducing information asymmetry; it is more reduced when such information is assured.•There are differences in terms of assurance attributes (provider and level of engagement).•Differences in terms of assurance attributes are even more relevant when controlling the institutional context.•Our findings may stimulate international corporations to assure sustainability information in order to decrease information asymmetry.•Our findings may stimulate international regulators to support programmes and requirements to ensure the assurance of sustainability reports.

This paper aims to examine the usefulness of sustainability reporting in reducing information asymmetry as result of lower dispersion and higher accuracy in financial analysts' earnings forecasts. The empirical results from an international sample of listed companies indicate that the disclosure of sustainability information alone is not sufficient in this regard as our findings indicate that information asymmetry is reduced to a greater when such information is assured, supporting the value relevance role of sustainability reporting and assurance. In addition, the empirical findings suggest differences in terms of assurance attributes (provider and level of engagement) and such differences are even more relevant when controlling the institutional context. Assurance is highly appreciated by investors in more stakeholder-oriented countries; however, in more shareholder-oriented environments, assurance affects information asymmetries only when it is provided by accounting professionals who also report a “reasonable” opinion.

Related Topics
Social Sciences and Humanities Business, Management and Accounting Business and International Management
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