Corporate Social Responsibility Assurance Research Articles

Fulfilling stakeholders' demand: Exploring CSR assurance's contribution to firms' environmental and social disclosures

AbstractThis paper rigorously explores the impact of corporate social responsibility (CSR) assurance on the environmental and social disclosures of S&P 500 firms over the period 2010–2018. Integrating annual financial, CSR assurance and environmental and social disclosures data, our study unveils a positive association between CSR assurance and firms' environmental and social disclosures. In a pioneering analysis, we delve into the nuanced interplay between CSR assurance, female directors and environmental and social disclosures. Intriguingly, our findings reveal a negative and significant interaction between female directors and CSR assurance, shedding light on potential substitutes in shaping environmental and social disclosures. Furthermore, our study uncovers the moderating effect of sensitive industries, indicating a positive relationship between CSR assurance and environmental disclosures. Importantly, these insights remain robust across alternative estimation approaches. This study marks a notable contribution by being the first to scrutinize the implications of CSR assurance on social disclosure, investigate the substitutive role of female directors in comparison with CSR assurance and shed light on the added significance of CSR assurance in firms operating in sensitive industries. Our findings provide valuable insights for corporations and stakeholders amid escalating demands for comprehensive and reliable reporting on environmental and social matters. Likewise, this study underscores the potential policy implications of promoting or mandating CSR assurance, given its positive impact on environmental and social disclosures. Policymakers are urged to consider initiatives fostering gender diversity on boards and industry‐specific approaches to enhance sustainability‐related disclosures, aligning regulatory frameworks with evolving stakeholder expectations.

Too little or too much? The curvilinear relationship between corporate social responsibility disclosure and investment efficiency in BRICS economies

AbstractThis research article investigates the complex relationship between corporate social responsibility disclosure (CSRD) and investment efficiency in the BRICS economies (Brazil, Russia, India, China, and South Africa). Through the lens of signaling theory, the study examines how CSRD serves as a signal to stakeholders and influences firms' investment decisions. A comprehensive dataset spanning 9240 firm‐year observations from 2011 to 2021 is analyzed to derive insights. The study reveals a multifaceted association between CSRD and investment efficiency. Initially, CSRD is found to increase signal costs, resulting in higher investment inefficiency. However, this effect is observed only up to a certain threshold. Beyond this point, CSRD starts reducing investment inefficiency, primarily due to improved signal benefits and perceived value. Additionally, the study introduces CSR assurance as a crucial moderator that influences the complex interplay between CSRD and investment efficiency. In summary, this research offers valuable insights into the strategic role of CSRD in BRICS economies, highlighting the significance of signal dynamics and the moderating impact of CSR assurance. Such insights can guide businesses and policymakers in these economies as they navigate the intricate landscape of CSR disclosure and its implications for efficient resource allocation.

COVID-19: judgment and decision making on CSR

Judgment and decision making (JDM) research in accounting focuses on the judgment and decision of prepares, user and auditor providers of financial and non-financial information, including sustainability information. The environment in which these judgment are made and how groups interact has changed substantially during the Covid-19 pandemic, ang likely post-pandemic. We focused on the impact these changes for corporate social responsibility (CSR) reporting, including manager decision on the preparation and use CSR information, and the effect of CSR reports and assurance on investors judgement.

Configurational analysis of corporate governance and corporate social responsibility reporting assurance: understanding the role of board and CSR committee

PurposeReacting to the calls in the contemporary literature to further examine the relationship between board attributes and firms’ decisions to obtain corporate social responsibility assurance (CSRA) through the use of pioneering techniques, this study aims to analyse the influence of such attributes together with the existence of a corporate social responsibility (CSR) committee on the adoption of CSRA using fuzzy set qualitative comparative analysis (Fs-QCA).Design/methodology/approachFs-QCA was performed on a sample of nonfinancial European companies listed on the STOXX Europe 600 index over the period 2016–2018.FindingsThe study findings indicate that the decision to obtain a CSRA report depends on a complex combination of the influence of the CSR committee and certain board attributes, such as size, experience, independence, meeting frequency, gender and CEO separation. These attributes play essential contributing roles and, if suitably combined, stimulate the adoption of CSRA.Practical implicationsThe study findings are important for policymakers, professionals, organisations and regulators in forming and modifying the rules and guidelines related to CSR committees and board composition.Originality/valueTo the best of the authors’ knowledge, this study represents the first examination of the impact of board attributes and CSR committees on the adoption of CSRA using Fs-QCA method. It also offers a novel methodological contribution to the board-CSRA literature by combining traditional statistical (logistic regression) and Fs-QCA methods. This study emphasises the benefits of Fs-QCA as an alternative to logistic regression analysis. Through the use of these methods, the research illustrates that Fs-QCA offers more detailed and informative results when compared to those obtained through logistic regression analysis. This finding highlights the potential of Fs-QCA to enhance our understanding of complex phenomena in academic research.

The Influence of Corporate Social Responsibility Disclosures and Assurance on Jurors’ Judgments

SUMMARYThis study examines whether management’s corporate social responsibility (CSR) motives and CSR assurance influence jurors’ negligence and punitive damages assessments using a 2 × 2 experiment. CSR activities can provide insurance-like protection from negative reactions during a corporate crisis if stakeholders perceive altruistic motives. However, it is not known whether this insurance-like protection applies during litigation. Findings suggest that disclosure of altruistic CSR activities (i.e., without expectation of financial returns) improves jurors’ affective response to the defendant and perceptions of company behavior prior to a negative event compared to self-serving CSR activities (i.e., expectation of financial returns), which reduce negligence and punitive damages assessments. However, when disclosures are assured, the relationship changes. In this scenario, altruistic and self-serving CSR have similar influences on jurors’ judgments. Overall, results suggest that CSR disclosure and assurance may provide benefits during litigation by increasing jurors’ affective reaction to the defendant and perceptions of the company’s behavior.

Auditors' Understanding of Corporate Social Responsibility (CSR) in Audits

This study explores auditors' understanding of Corporate Social Responsibility (CSR) in audit engagements, aiming to elucidate the complexities and challenges faced in evaluating CSR-related disclosures. The research investigates auditors' comprehension of CSR concepts, challenges encountered in auditing CSR disclosures, the influence of organizational culture, reliance on regulatory frameworks, and the necessity for continuous professional development. Utilizing a qualitative research approach, data was gathered through interviews and literature reviews. Findings reveal a spectrum of understanding among auditors, influenced by factors such as education, training, and organizational culture. Challenges in auditing CSR disclosures include the subjective nature of CSR reporting, lack of standardized frameworks, and difficulties in assessing reliability. Organizational culture significantly shapes auditors' approaches, with ethical cultures prioritizing CSR considerations. Auditors rely on regulatory frameworks, particularly International Standards on Auditing (ISAs), yet face challenges in their application to CSR assurance. Continuous professional development emerges as crucial for enhancing auditors' competencies in auditing CSR activities. This study contributes to understanding the dynamics of CSR auditing, highlighting the importance of addressing challenges and promoting a culture of accountability and sustainability within audit firms.

Which firms opt for corporate social responsibility assurance? A machine learning prediction

AbstractOn the background of voluntary assurances made by corporations in line with the assertions in their corporate social responsibility disclosures, we investigate which types of firms will obtain an independent certification of their corporate social responsibility disclosures. The study is based on firms listed on the Johannesburg Stock Exchange (JSE) from 2015 to 2019. Deviating from traditional regression approaches, we employ machine learning techniques and show that machine learning techniques obtain superior performance compared to traditional logistic regression at predicting the likelihood of corporate social responsibility assurance by a corporation. The result also shows that large firms with high CSR score, independent board, highly leveraged and belonging to finance industry are the most likely to assure their CSR disclosures.

Corporate social responsibility assurance, board characteristics and social performance disclosure. Evidence of listed firms in India

AbstractThe study examines board characteristics, corporate social responsibility (CSR) assurance and social performance disclosure of listed firms before and after mandatory CSR reporting in India. We used the Indian stock market as the testing grounds and applied panel regression and difference‐in‐differences to analyse 960 firm‐year observations between 2010 and 2021. The first findings show that independent board directors and total board size are insignificant in CSR assurance engagement in a mandatory CSR policy period. However, CEO duality is less than likely causing CSR assurance engagement. The second findings show that CSR assurance engagement more than likely causes an increase in social performance disclosure before mandatory CSR policy implementation and increases social performance after policy implementation. The third findings show that the interactive effect of board characteristics (independent directors, total board size and CEO duality) and CSR assurance engagement causes an increase in social performance disclosure. The study sought clarity on the impact of CSR assurance and mandatory CSR reporting on information asymmetry problems to stakeholders. The study also contributes new knowledge on the influence of the interactive effect of board characteristics and CSR assurance on the social performance disclosure of listed firms in India.

Does external assurance stimulate higher CSR performance in subsequent periods? The moderating effect of governance and firm visibility

PurposeDrawing on legitimacy theory, this study aims to investigate whether the benefits of the external assurance process pass beyond the current period and help firms improve corporate social responsibility (CSR) performance in the subsequent periods. Furthermore, the authors examine whether corporate governance (CG) and firm visibility moderate the relationship between assurance and CSR performance.Design/methodology/approachThe authors retrieved data from Thomson Reuters from 2002 to 2019 and executed a fixed-effects (FE) panel regression analysis. The country-level sample distribution includes 63 countries with 4,625 unique firms and 29,054 data points within these countries. The authors run several robustness tests using an alternative subsample, instrumental variable regression analysis, country-industry-year FE regression analysis, excluding the financial sector and including additional control variables and regression analysis based on propensity score matching.FindingsThe findings indicate that external assurance helps firms achieve greater CSR performance in the current period and the subsequent two periods following external assurance. However, external assurance exerts its strongest positive impact on CSR performance in the current period, and its influence extends, albeit at a weaker level, to the following two periods. Furthermore, the first moderation analysis reveals that governance structure helps firms translate the assurance process into the greater social performance but does not help to achieve higher environmental performance. The second moderation analysis reveals that firm visibility/size positively moderates between the assurance process and governance and social performance but not between the assurance process and environmental performance.Originality/valueDespite the concurrent association between CSR performance and assurance being examined before, the lag-lead relationship is the novelty of the study to highlight the long-term effect of assurance on CSR performance. Besides, although the direct effect of both CG practices and firm visibility on CSR performance and the external assurance process has been investigated before, the authors extend the literature by examining the moderating effect of CG practices and firm visibility on the external assurance and CSR performance relationship. This provides a better explanation of the extent to which the effect of external assurance on CSR performance is constructed and conditioned by CG practices and firm visibility, thereby drawing attention to contingencies’ role in firms’ practices.

Does audit firm tenure enhance firm value? Closing the expectation gap through corporate social responsibility

PurposeThis study aims to examine the moderating effect of audit firm tenure on the association between corporate social responsibility (CSR) and firm value. Prior studies provide mixed results on this association, which may be due to differing theoretical expectations related to CSR and firm value. It is also possible that external stakeholders are unable to differentiate between positive and negative CSR investments, as CSR reports are generally not assured by independent third parties. Thus, the authors propose that audit firm tenure may be used by external stakeholders to evaluate CSR performance.Design/methodology/approachThe authors use an ordinary least squares regression to examine the moderating effect of audit firm tenure on the relation between CSR and firm value after controlling for other determinants of firm value and various internal and external governance mechanisms documented in the literature. The sample consists of 15,707 firm-year observations from US firms during the sample period of 2000 to 2012. The authors measure CSR quality using rating scores from MSCI ESG STATS (formerly the KLD database), audit firm tenure as the number of years the incumbent auditor has served the client and firm value using Tobin’s Q.FindingsThe results indicate that CSR is positively associated with firm value when audit firm tenure is long but not when tenure is short. The results are robust to alternative measures of firm value, CSR performance scores, and individual CSR dimensions. The evidence supports the argument against mandatory audit firm rotation in the USA.Research limitations/implicationsFuture studies could examine a similar issue in alternative settings and/or look at cross-sectional variations among firms on the association between CSR and firm value by other auditor traits such as auditor industry specialization and big-name reputation. Additionally, as auditor alone is unable to ensure the quality of management disclosures and their accountability, future studies could examine the moderating effect of internal and other external governance mechanisms on the association between CSR and firm value, exploring when the signaling effect of auditor tenure on CSR reporting quality and its effect on firm value is most salient.Practical implicationsThe findings are important to regulators and investors. The authors provide evidence that longer audit tenure serves as a signaling device for external investors with regard to the quality of a firm’s CSR performance. Hence, the study facilitates regulators’ cost-benefit analysis related to mandating audit firm rotation. The evidence suggests that mandating a term limit on auditor tenure may have the unintended consequence of eliminating a signaling effect of auditor tenure on the quality of CSR disclosures under information asymmetry. This supports the Public Company Oversight Board’s decision to forgo the requirement of mandatory audit firm rotation in the USA.Originality/valuePrior literature presents mixed findings on the association between CSR performance and firm value based on a variety of underlying theories (economic, stakeholder and contingency theory). Literature on mandatory auditor rotation has concentrated on the auditor tenure effect on perceived and actual audit quality as reflected in earnings quality. Relying on agency theory, this study posits that auditor tenure serves as a signal for the quality of CSR activities in the absence of CSR assurance reporting as CSR quality can be difficult to evaluate. The authors provide evidence that audit tenure moderates the association between CSR activities and firm value and longer audit tenure makes it more likely that the CSR activities are associated with increased firm value.

Willingness to invest and the assurance of corporate social responsibility reports

AbstractRecent research has found that the effect of corporate social responsibility (CSR) information on investment decisions will be eliminated when it is explicitly assessed, especially when CSR is not related to core business activities (immaterial CSR issues). We thus extend prior research by investigating whether (1) CSR assurance increases investors' willingness to invest when CSR performance is material or immaterial to core business activities and (2) CSR assurance moderates the effect of explicit assessment and CSR information on investment judgment. A 2 × 2 × 2 between‐subjects experiment was conducted using 213 professional investors. Overall, our results suggest that investors' willingness to invest is greater when positive CSR is verified by third‐party assurance in both material and immaterial CSR conditions. In addition, CSR assurance has a significant effect on investment judgment when immaterial CSR performance is explicitly assessed. As the affect‐as‐information heuristic (i.e., heuristic processing) is likely to be removed when CSR performance is explicitly assessed, the results of this study indicate that the affect heuristic is only eliminated when immaterial CSR is not assured, suggesting that CSR assurance moderates the effect of explicit assessment on investment judgment. Consistent with systematic‐heuristic theory, our results thus confirm that the systematic processing of CSR information does not necessarily attenuate affect heuristic processing; rather, these two processing modes can co‐occur. Our results concerning the impact of CSR assurance on positive CSR information inform firms that third‐party assurance affects investment judgment, especially for parties who consider purchasing these services, for example, managers or audit committee members. As CSR assurance is not mandatory, the audit profession could also be interested in our findings, as they might encourage firms to assure their nonfinancial information to enhance disclosure credibility. The inconclusive results on how CSR assurance affects investment judgment warrant further investigation of this issue in other reporting environments in different countries. Nevertheless, our findings contribute to the CSR literature by identifying novel aspects of the value of CSR assurance in different contexts, that is, the moderating role of CSR assurance and the explicit assessment of CSR information during investment decisions.

Corporate social responsibility and COVID‐19: Prior reporting experience and assurance

The novel COVID‐19 has created an exogenous shock to capital markets and, hence, an ideal opportunity for researchers to assess whether CSR‐related activities provide an insurance‐like mechanism to protect firms against the shock. Using a large sample of 4361 firms domiciled in 40 countries, we investigate the roles of CSR reporting and assurance in the negative consequences of COVID‐19 on firm value. The results confirm that prior CSR reporting experience buffers firms against the adverse effects of the health crisis. The results also support that not only does the assurance on CSR reports create a buffering effect against the health crisis, but it also intensifies the buffering effects of prior CSR reporting experience against the pandemic. Moreover, using difference‐in‐difference method for testing the link between CSR reporting and firm value, we show that the positive association of reporting and assurance with firm value is more pronounced during the pandemic as compared with the years preceding it. The results of this study are robust to various analyses. Replicating the analyses to the context of the global financial crisis, we find that prior CSR reporting experience and assurance provide similar buffering effects when a market is exposed to various exogenous shocks. The results also hold for the mandatory disclosure regimes. By distinguishing first and subsequent reports and assurance, we show that, unlike subsequent CSR reports and assurance, the initial ones cannot mitigate the negative effects of the crisis on firm value, indicating that stakeholders take into account longer‐term CSR reporting experiences. Aside from reporting and assurance aspects of CSR, we analyze the role of CSR report's quality and accuracy and show that the adoption of Global Reporting Initiatives (GRI) frameworks can enhance socially responsible firms' resilience against systematic shocks.

CEO Career Horizon and Corporate Social Responsibility Assurance

ABSTRACT Framing on the premise of upper echelons theory, this study explores the relationship between a chief executive officer’s career horizon and corporate social responsibility assurance in an emerging market. Using a 9-year (2010–2018) unique sample of A-share listed firms in China, we found that the chief executive officer’s age is an important determinant of corporate social responsibility assurance and is significantly negatively associated with corporate social responsibility assurance, indicating that the chief executive officer’s age increase experienced a significant decline in corporate social responsibility assurance. These findings are consistent with our expectation that as CEOs grow older their rigidity increase with their age and this cause to decrease their interest to engage in corporate social responsibility assurance. Further, the negative relationship between the chief executive officer’s age and corporate social responsibility assurance is significantly positively moderated by both state-owned enterprises and heavily polluted firms. Our results contribute to the existing literature and have implications for potential policymakers.

Corporate social responsibility committees and the use of corporate social responsibility assurance services

This study examines whether corporate social responsibility (CSR) committees associate with the external assurance of CSR reports. Specifically, we consider the presence and effectiveness of CSR committees. Using a sample of Australian firms over the period 2004–2016, we show the mere presence of a CSR committee is not related to the external assurance of CSR. However, CSR committee effectiveness is positively related. In addition, firms with higher CSR committee effectiveness are more likely to seek external assurance provided by the Big4 accountancy firms and acquire financial audit and CSR assurance services from the same provider. Taken together, CSR committee effectiveness plays an active role in CSR assurance services. Our results are particularly relevant to those with interests in understanding the demand and choice of external CSR assurance services, as well as the impact of corporate governance mechanisms on these services.

The role of the audit committee in enhancing the credibility of CSR disclosure: Evidence from STOXX Europe 600 members

AbstractThis study examines the influence of audit committee attributes, namely financial expertise, independence, meeting frequency and size, on the adoption of CSR assurance. The study also offers insight into the effect of audit committee attributes on the scope and level of CSR assurance and the selection of CSR assurance providers. Contextually, this is achieved using a sample of European companies listed on the STOXX 600 index over the period 2012–2018. The findings show that attributes related to audit committee financial expertise, audit committee independence and audit committee meeting frequency and the existence of a CSR committee, are positively linked with the adoption of CSR assurance. Moreover, our empirical analysis further highlights the critical role of audit committee financial expert members in enhancing the scope and level of CSR assurance. Furthermore, audit committee with more frequent meetings lead to higher assurance scopes. Our findings offer significant and multidimensional insights for regulators, policymakers and professionals, regarding the revision and establishment of regulations concerning the audit committee structure.

Impact of chief financial officer’s experience on the assurance of corporate social responsibility reports in China

PurposeGiven the emerging importance of the chief financial officer’s (CFO) role, this study aims to probe into the prevalence of corporate social responsibility (CSR) assurance practices in China and to examine whether or not CFO foreign, professional or academic experience affects the likelihood of CSR assurance decision.Design/methodology/approachAll A-share listed Chinese companies during the year 2008–2017 with 5,144 firm-year observations have been investigated for this study.FindingsThis study finds a positive effect of CFO foreign and professional experience on CSR assurance. No significant association has been found between the CFO’s academic experience and CSR assurance. Additional analysis for Global Reporting Initiative (GRI) sampled firms shows that the academic and professional experience of CFOs has a significant positive association with CSR assurance. However, the main findings are replicated in the case of firms under mandatory CSR reporting.Research limitations/implicationsThe limitations of this study are its generalizability, unidimensional measure of CSR assurance which is unable to capture its quality and explore the other traits of CFOs.Practical implicationsIt provides assurance practitioners with valuable longitudinal data on China’s CSR reporting and assurance services. Also, firms should recognize the importance of having competent CFOs to improve the credibility of their CSR reporting. The cross-sectional variation analysis (GRI and mandatory CSR) will help firms to assess the value of each CFO attribute for their nonfinancial reporting and auditing choices while considering internal and external stakeholder demands.Originality/valueThis study not only updates the existing understanding of CSR assurance methods in China but also explains the significance of CFO-specific experience in enhancing the credibility of nonfinancial reporting.

Contribución de la calidad de la garantía de la RSE a la evaluación del mercado de los informes voluntarios de RSE: Una investigación del contexto francés

Contribución de la calidad de la garantía de la RSE a la evaluación del mercado de los informes voluntarios de RSE: Una investigación del contexto francés

The moderating effects of corporate social responsibility assurance in the relationship between corporate social responsibility disclosure and corporate performance

AbstractThe aim of this research is to analyse the impact of corporate social responsibility (CSR) disclosure on corporate performance. It also analyses the moderating effect of CSR assurance on the association between CSR disclosure and corporate performance, contributing to knowledge in this area. The theoretical framework of the study is based on stakeholder theory and legitimacy theory. The sample used consists of 9861 international firm‐year observations collected from the Thomson Reuters database between 2009 and 2018. Our model has been estimated using the generalised method of moments (GMM) estimator. The findings show that CSR disclosure is positively associated with corporate performance, as proposed in our hypothesis. Additionally, our evidence shows that CSR assurance plays a positive moderating role between CSR disclosure and corporate performance.

Attributes of corporate boards and assurance of corporate social responsibility reporting: evidence from the UK

PurposeThis study aims to investigate the relationship between the attributes of corporate boards in UK companies and their tendency to assure their corporate social responsibility (CSR) reports.Design/methodology/approachFrom the agency theory perspective, the authors examine the impact of board attributes on the assurance of CSR reports for the Financial Times Stock Exchange (FTSE) 350 during 2016–2019. The authors used annual integrated reports, companies’ websites and Thomson Reuters Eikon database for data collection and the logistic regression for data analysis.FindingsThe results confirm that some board attributes significantly influence a company’s decision to assure its CSR reports. While board size, board tenure, the presence of female board members and female executive directors and Chief Executive Officers (CEOs)’ global working experience positively contribute to CSR assurance (CSRA) decisions, the chairman’s independence negatively contributes to it. However, board independence, board meetings and board financial expertise demonstrate no effect on the CSRA decision.Research limitations/implicationsThe authors focus on some attributes of board members, but the authors did not consider board diversity in its broader meaning. Moreover, the effect of board committees and their attributes on CSRA was not addressed. The authors also did not consider the impact of scope, the quality level of assurance service and the differences between assurance providers on companies’ decisions to neither undertake CSRA nor choose between assurance providers.Practical implicationsThe study provides insights into the increasing demand on voluntary assurance to boost the credibility of CSR reports and the role of the board of directors (BOD) in taking this initiative. The findings highlight the importance of board diversity (e.g. gender) in improving transparency and sustainability reporting, which can help policymakers and regulators in shaping future governance policies. Additionally, the findings refer to a drawback in the UK Corporate Governance Code regarding the chairman’s independence, which requires corrective actions from the Financial Reporting Council. The findings raise concern over the small share of audit firms in the assurance service market, despite the growing demand for these services in the UK, which may require more attention to these services from the audit firms.Social implicationsCompanies are increasingly pressurized, especially after the COVID-19 pandemic, to discharge their accountability to stakeholders and to act in a socially responsible manner in their business activities. CSR reporting is one of the main tools that companies use to communicate their social activities. Understanding the determinants of voluntary CSRA helps to increase the credibility of CSR reports and the favorable response to social pressure.Originality/valueThe authors add empirical evidence to the limited literature on CSRA about the role of the BOD in undertaking companies’ social responsibility, improving CSR reporting and reducing information asymmetry. It also highlights the significance of maintaining a balanced BOD in terms of gender, experience and tenure, in minimizing the risk of perpetuating non-transparent integrated reporting.

CSR assurance practice and financial distress likelihood: evidence from India

Purpose The purpose of this study is to examine the effect of corporate social responsibility assurance practice (CSRAP) on the financial distress likelihood of listed firms in India. It uses the signalling theory to interpret the relationship among the variables of the study. Design/methodology/approach The study used the Indian stock market as the testing grounds and applied probit and panel probit regression to examine the data set with 800 firm-year observations from 2010 to 2019. Findings The study’s first findings show that firms with an assurance service have a negative correlation and are less likely to stay in financial distress situations for an extended period. However, corporate social responsibility (CSR) assurance has a positive but weak correlation with insignificance with financial distress likelihood of firms in India. The authors also find that the engagement of CSR assurance and level of assurance (limited assurance) does not cause a change in a firm financially distress likelihood of firms in India. However, as assurance service providers, auditing firms are more likely to reduce a firm’s likelihood of financial distress. Finally, the study shows that CSRAP (CSR assurance, assurance service providers and level of assurance) does not moderate the association between CSR expenditure and financial distress likelihood of listed firms in India. Originality/value The study findings are the first to examine the level of assurance and financial distress of firms according to the authors’ knowledge. This study also adds new knowledge to the factors that cause or reduces the financial distress of listed firms, including CSRAPs.