Audit committees and the demand for sustainability reporting assurance

Citation

Al-Shaer H & Zaman M (2016) Audit committees and the demand for sustainability reporting assurance. In: Audit & Assurance Conference, Said Business School, Oxford University, 05.05.2016-06.05.2016. Oxford.

Abstract
Increasing concern about reliability of sustainability reporting and the broadening of audit committee remit from conformance to performance may induce audit committees to exercise greater oversight over sustainability reporting and to signal this to stakeholders by having the report externally assured. There is a paucity of research examining sustainability reporting assurance (SRA) in the context of the corporate governance mosaic. We examine the effect of audit committees on SRA while recognizing interdependencies between governance mechanisms and their potential complementary and substitution effect on SRA. We find that effective audit committees play a complementary role, i.e. incremental to that of the boards of directors and sustainability committees, on SRA. Our evidence suggests that parties in the governance mosaic serve a substantive, rather than a symbolic, role and help improve the overall level of monitoring.