Factors that Influence Perceptions of Greenhouse Gas Assurance Provider Quality

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Abstract

This study investigates the key factors that influence perceptions of greenhouse gas (GHG) assurance provider quality. The Australian institutional setting is used for this study since GHG disclosures are mandatory, yet assurance on these disclosures is voluntary. A survey questionnaire was completed by 49 participants, including all three parties to the GHG assurance relationship (i.e. assurers and preparers of GHG emissions reports and professional investors from the Responsible Investor Group) who rated the importance of 34 factors to their perception of assurance provider quality. Consistent with prior research examining assurance provider quality in the financial statement audit setting, the factors assessed quality along three dimensions, assurance firm factors, assurance team leader factors and assurance team factors. Results indicate that perceptions of assurance provider quality in the GHG setting, is primarily influenced by the ethics and integrity of the assurer as well as the assurance, GHG emissions and regulatory knowledge of the assurance team leader and the assurance team. Less importance was placed on the experience and industry specific knowledge of the assurer and on the degree of communication between the assurer and the client. It is also found that the factors influencing the perception of GHG assurance provider quality differ between the preparers of GHG emission disclosures and the assurers of such disclosures. Preparers place more importance on assurance firm level factors while assurers see assurance team leader factors as being more important. In addition, assurers believe that assurer independence is more important than do the preparers. Finally, there are some important differences in the perceptions of the importance and role of communication between the assurer and the preparer.

Author

• Wendy Green, The University of New South Wales