Analysis of 4 different case studies

Analysis of 4 different case studies

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Please have a look at the slides and the last slide there is the requirements that we need to do and apply on all the cases i will also upload an example of how to it.

Use the assurance statements uploaded to identify the following elements
Assurance provider
Assurance scope
Independence of assurance provider
Assurance work undertaken
Stakeholder participation
Discussions will be based on differences and similarities of the elements
Evidence of: (a) Managerial capture, (b) Stakeholder Engagement
Do you think that accountability has been discharged?
Do you think that the assurances statements that you have been given have served their purpose? Why (answer in a theoretical context?

Unerman, O’Dwyer and Bebbington Chapter 9
Other essential readings:
Cooper S. M. and D. L. Owen (2007), “Corporate social reporting and stakeholder accountability: The missing link”, Accounting, Organizations and Society, 32, pp.649-

Elijido-Ten, E., Kloot, L. and Clarkson, P. (2010), “Extending the application of stakeholder influence strategies to environmental disclosure: An exploratory study

from a developing country”, Accounting, Auditing and Accountability Journal, 23(8), 1032-1059.
Greenwood, M. (2007), “Stakeholder Engagement: beyond the myth of corporate responsibility”, Journal of Business Ethics, 74(4), 315-327.
Manetti, G. and L. Becatti (2009), “Assurance services for Sustainability Reports: Standards and Empirical Evidence”, Journal of Business Ethics, 87: 289-298.
O’Dwyer, B. and Owen, D. L.  (2005), Assurance statement practice in environmental, social and sustainability reporting: a critical evaluation”, The British

Accounting  Review,  37, pp.205-229.
O’Dwyer, B., Owen, D. L.  and Unerman, J. (2011), “Seeking legitimacy for new assurance forms: the case of assurance on sustainability reporting”, Accounting,

Organizations and Society, 36(1), 31-52.
Perego, P. (2009), Causes and Consequences of Choosing Different Assurance providers: An International Study of Sustainability Reporting”, International Journal of

Management, 26(3), pp. 412-425.
Simnett, R., Vanstraelen, A. & Chua, WF. (2009). Assurance on Sustainability Reports: An International Comparison. The Accounting Review. Vol.84, No.3, pp.937-967.

Present a historical overview of developments of assurance practices
–  Critically evaluate of the potential significant of assurance statement and its implications to stakeholders and managers
–  Identify the key elements of assurance statements
–  Present an in-depth discussion of the relevant standards and regulations
–  Present a critical overview of the current assurance practices

The purpose of assurance is to ‘ensure credibility’, ‘add value’, ‘increase robustness, accuracy and trustworthiness’ of disclosed sustainability information.
Performs similar function to auditing of financial reports
A tool for discharging accountability
Has witnessed gradual growth since the late 1990’s
Has been endorsed by renowned bodies, such as ACCA, ICAEW, European Commission and GRI
Remains a voluntary activity

As a communication mechanism, there is high level of ambiguity and variability within assurance statements (Deegan et. al, 2006)
Questionable independence of assurance providers (O’ Dwyer and Owen, 2007)
Possible indication of managerial capture (Edgley et. al, 2010)
Difficult to make comparisons (Ball et. al, 2000)
Stakeholder participation and involvement remains minimal (Manetti and Toccafondi, 2012)

Significant increases in provision of external assurance statements
In 2003, 40% included external assurance statement compared to only 17% to previous years.
2005 KPMG survey highlights the somewhat patchy  nature of the provision:
The majority of statements restrict themselves to assurance on specific information or data sets
Only about 20% of statements cover the whole report
There are also clear country and industrial differences
2011 KPMG survey reports that a formal assurance statement is included for companies around the Globe:
2011: 46%
2008: 40%,
2005: 30%,
2002: 29%

For example:
– more than 50% of Italian & UK reports included verification statements
– Financial services and Oil and Gas predominate

Mainly large companies provide verification statements.
58% of assurance statements were confirmed by accounting firms. The remaining were specialist consultancies.

Fundamental concerns were raised by (Ball et al, 2000 and Kamp-Roelands, 2002) over:


Kamp-Roelands pointed out major inconsistencies apparent in terms of:

subject matter addressed,
scope of the exercise carried out objectives,
assurance criteria and procedures applied,
level of assurance provided
wording of opinions offered.

Ball et al raised even more fundamental issue:
Managerial control over the whole assurance process
Emphasis being placed by assurance providers on management systems as opposed to performance-based issues

Simnett et al (2009):
“… companies seeking to enhance the credibility of their reports and build their corporate reputation are more likely to have their sustainability reports assured,

although it does not matter whether the assurance provider comes from the auditing profession. …also … companies operating in stakeholder-orientated countries are more

likely to choose the auditing profession as an assurer.

A major problem facing early verifiers lay in the absence of any clear standards or guidelines that could be used to govern the approach adopted.
This has been addressed by the issuing of sustainability assurance practice guidelines from a number of influential bodies, most notably the:
Fédération des Experts Comptables Européans (FEE, 2002)
The Global Reporting Initiatives (GRI, 2002)
The Institute of Social and Ethical Accountability (Accountability, 1999, 2003, 2005)

Despite the Differences between FEE and GRI Guidelines,
…. there is a board agreement concerning the elements that should make up a sustainability assurance statement.


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