Assuring A New Market: The Interplay Between Country-Level And Company-Level Factors on The Demand for Greenhouse Gas (GHG) Information Assurance and The Choice of Assurance Provider

Posted: 16 Sep 2012 Last revised: 9 Feb 2016

See all articles by Shan Zhou

Shan Zhou

The University of Sydney

Roger Simnett

Deakin University; UNSW Australia Business School, School of Accounting

Wendy Green

UNSW Australia Business School, School of Accounting

Date Written: 2016

Abstract

The need for credible emissions reporting has created international demand for a new and specific type of assurance engagement: assurance of greenhouse gas (GHG) emissions information. This study provides an examination of the international GHG assurance market to identify key potential determinants of both the decision to assure and the choice of assurance provider. As well as providing details on this new assurance service, we extend current knowledge by undertaking a multi-level analysis of both country-level (stakeholder orientation and strength of legal system) and company-level (corporate governance) variables. After correcting for potential self-selection bias, our results reveal significant variations in country patterns for both of these decisions, with both the demand for GHG assurance services and the preference for an accounting profession assurance provider found to be higher in countries with a stakeholder-orientation and a less stringent legal enforcement system. Further, we find company-level corporate governance systems and processes to be a significant moderator of the country-level factors for both decisions.

Keywords: Greenhouse gas assurance; stakeholder theory; legal environment; corporate governance

JEL Classification: M42

Suggested Citation

Zhou, Shan and Simnett, Roger and Green, Wendy, Assuring A New Market: The Interplay Between Country-Level And Company-Level Factors on The Demand for Greenhouse Gas (GHG) Information Assurance and The Choice of Assurance Provider (2016). Auditing: A Journal of Practice & Theory, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2147359 or http://dx.doi.org/10.2139/ssrn.2147359

Shan Zhou

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Roger Simnett (Contact Author)

Deakin University ( email )

75 Pigdons Road
Victoria, Victoria 3216
Australia

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052
Australia
+61 2 9385 5825 (Phone)
+61 2 9385 5925 (Fax)

Wendy Green

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052
Australia

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