What impact do countries have on levels of sustainability assurance? A complementary‐substitutive perspective

Abstract

AbstractThis paper focuses on levels of sustainability assurance and the impact countries have on them. The level, the “how” aspect, indicates the nature and extent of the work performed by practitioners and, therefore, the degree of confidence that stakeholders should have in the assured sustainability report. This paper examines how country factors influence the level of assurance of sustainability reports—limited/moderate vs. reasonable/high assurance—from a complementary and substitutive perspective. The paper proposes a regression model in which countries differ not only in how they protect stakeholders but also in their legal public enforcement. For a sample of international firms for the period 2007–2016, the paper's evidence supports the idea that a reasonable/high level of assurance is provided in the assurance statements of firms that operate in countries with systems orientated towards improving sustainability transparency—complementary mechanism—and lower levels of public enforcement—substitute mechanism.