Farooq, M.B. & de Villiers, C. (2020). How sustainability assurance engagement scopes are determined, and its impact on capture and credibility enhancement

Question 1

What is the intended purpose of sustainability assurance?

Answer 1

To enhance the credibility, reliability, and balance of sustainability reports by verifying disclosed information through independent third-party providers.

Question 2

What is the key issue affecting sustainability assurance’s effectiveness?

Answer 2

Managerial & professional capture – managers influence the assurance scope to avoid disclosing bad news (managerial capture), while assurance providers prioritize securing business over full independence (professional capture).

Question 3

What happens to the perceived value of sustainability assurance over time?

Answer 3

Diminishing returns – as companies improve their reporting, each successive assurance engagement provides fewer new recommendations, making managers question its value and seek cost reductions.