cost to obtain higher quality assurance, because they are often under strict public scrutiny. Interestingly, higher debt in the capital structure is associated with higher quality in the current sample. This may suggest that firms with a larger debt proportion in their capital structure may aim to provide higher assurance quality. This may be due to pressure from debtholders and investors, who may require higher accuracy and credibility to compensate for their higher levels of investment risk (Ahn et al., 2006; Blackwell et al., 1998; Degryse & De Jong, 2006). It makes sense that debtholders and investors would seek higher disclosure quality; therefore, they would also require higher quality assurance. 5.4.2 Could the assurance quality score be biased? Although discussion in the literature about which category of assurance providers deliver higher quality was inconclusive, some studies documented higher quality when assurance was performed by an assurance provider from the accounting profession, as opposed to consultants and environmental specialists (Hodge et al., 2009; Perego & Kolk, 2012; Zorio et al., 2013). The results shown in Table 10, panel A contradict the expectation proposed by H 4 , that AssurQuality should increase when the assurance provider is an accountant. This contradiction could be due to accountants’ inherent
THE VALUE RELEVANCE OF CSR ASSURANCE 102 caution in expressing their opinion, which often leads to less informative and more concise assurance statements, as opposed to environmental specialists (consultants), who seem to provide more elaborate and informative recommendations and conclusions (Perego & Kolk, 2012). Furthermore, consultants often rely on AA1000 AS for an assurance engagement, where they score higher than accountants do in Materiality , because they often provide detailed descriptions of material issues. This scenario also applies to other two principles contained in the AA1000 Assurance Principles Standard ( AA1000 APS ), which are inclusivity and responsiveness to stakeholders (Perego & Kolk, 2012). Environmental Specialists (consultants) also score higher in these two principles. Accountants sometimes follow the AA1000 AS , however, but they tend to rely more on related accounting- and auditing-driven standards (the ISAE3000 ). This disparity motivated further research on the question of whether higher AssurQuality scores were associated with the standards used rather than the Assurance Provider Profession or the Level of Assurance provided. Panels B and C in Table 10 show that the Use of AA1000 AS standards is positive and significant ( p < .01), which suggests that quality appears to be dependent on the Use of AA1000 . This result is also consistent with the finding that accountants in the current sample seemed to provide a lower quality of assurance, because they tended to rely on the ISAE3000 exclusively. In contrast, environmental consultants preferred the AA1000 AS .
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