Content area
Full Text
Introduction
The recent financial crisis and the consequences (e.g. fair value losses) of several fraud scandals have illustrated the need for more corporate transparency (Wild and Van Staden, 2013; Wulf et al., 2014). As a consequence, there is a demand for the improvement of corporate governance mechanisms and deeper insights into business processes (Adams et al., 2011; Cohen et al., 2012). In response, companies have generated non-financial information that reflects the impact of corporate activities on the social and ecological environment. To communicate the information to their investors, companies have either generated stand-alone reports (environmental, social, corporate social responsibility or sustainability report) or added the information to the annual financial report (Cohen et al., 2012; Simnett et al., 2009b). However, the different parts of the reports were usually not integrated in a coherent document which can lead to a fragmentation of important information. Therefore, the International Integrated Reporting Council (IIRC), founded in 2010, has developed a framework which enables companies to create an integrated and transparent report based on financial and non-financial indicators. Meanwhile, this report is supposed to be “[…] a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term” (International Integrated Reporting Council (IIRC), 2013, p. 29).
Since the foundation of the IIRC, more than 100 companies worldwide have participated in a pilot program and have implemented this report format (IIRC, 2013). Nevertheless, the participation in IIRC’s pilot program has not guaranteed the accuracy of the disclosed information. Although the IIRC framework and the guidelines of the Global Reporting Initiative (GRI) aim to enhance transparency of corporate reports, many reports still lack in quality regarding accuracy, completeness, materiality, and transparency (Wild and Van Staden, 2013; Wulf et al., 2014)[1]. This quality is at least partly attributable to the fact that integrated reports are still mostly voluntary and not assured (Marx and Van Dyk, 2011).
Several studies already examined the benefit of external assurance in accordance with the disclosure of non-financial information (e.g. Blackwell et al., 1998; Carey et al., 2000; Chow, 1982). Regarding voluntary reports, such as sustainability or corporate social responsibility reports, external assurance is an attribute that adds...