Does external assurance enhance the credibility of csr reports? Evidence from csr-related misconduct events in Taiwan

Kai Du, Shing Jen Wu

Research output: Contribution to journalArticle

Abstract

This study examines the credibility of corporate social responsibility (CSR) reports and the role of external assurance on CSR reports. Based on a sample of listed firms in Taiwan, we find that the issuance of CSR reports is not associated with a lower incidence, or frequency, of future CSR-related misconduct, unless accompanied by external assurance. In other words, external assurance can enhance the credibility of CSR reports. Moreover, the perceived credibility of CSR reports depends on whether firms genuinely fulfill their CSR commitments. For first-time offenders, prior CSR reports play a significant role in protecting firm value when misconduct does occur; however, for repeat offenders, such an insurance role does not exist, regardless of whether the CSR report is assured or not. Our findings attest to the benefits of CSR assurance and underscore the importance of understanding CSR practice in the context of country-specific institutions.

Original languageEnglish (US)
Pages (from-to)101-130
Number of pages30
JournalAuditing
Volume38
Issue number4
DOIs
StatePublished - Nov 2019

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Assurance
Taiwan
Corporate Social Responsibility
Credibility
Firm value
Repeat offenders
Insurance

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

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abstract = "This study examines the credibility of corporate social responsibility (CSR) reports and the role of external assurance on CSR reports. Based on a sample of listed firms in Taiwan, we find that the issuance of CSR reports is not associated with a lower incidence, or frequency, of future CSR-related misconduct, unless accompanied by external assurance. In other words, external assurance can enhance the credibility of CSR reports. Moreover, the perceived credibility of CSR reports depends on whether firms genuinely fulfill their CSR commitments. For first-time offenders, prior CSR reports play a significant role in protecting firm value when misconduct does occur; however, for repeat offenders, such an insurance role does not exist, regardless of whether the CSR report is assured or not. Our findings attest to the benefits of CSR assurance and underscore the importance of understanding CSR practice in the context of country-specific institutions.",
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Does external assurance enhance the credibility of csr reports? Evidence from csr-related misconduct events in Taiwan. / Du, Kai; Wu, Shing Jen.

In: Auditing, Vol. 38, No. 4, 11.2019, p. 101-130.

Research output: Contribution to journalArticle

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