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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

journal contribution
posted on 2016-01-01, 00:00 authored by Shan Zhou, Roger SimnettRoger Simnett, Wendy J Green
SUMMARY 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 multilevel 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. JEL Classifications: M42.

History

Journal

Auditing: a Journal of Practice and Theory

Volume

35

Pagination

141-168

Location

Sarasota, Flo.

ISSN

0278-0380

eISSN

1558-7991

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal, C Journal article

Issue

3

Publisher

American Accounting Association