Sustainability assurance: an emerging market for the accounting profession

Purpose: The purpose of this study is to examine firm-specific characteristics that influence firms’ choice of assurance provider in sustainability assurance. The market for sustainability assurance consists of three types: accounting firms (particularly the Big 4 firms), non-accounting specialist consulting firms (that specialise only in sustainability issues) and non-accounting general consulting firms (that provide general advisory/consulting services). Design/methodology/approach: Using a sample selected from the top 100 publicly listed companies in the UK and USA that published a sustainability report in 2010 and 2011, respectively, for which assurance was obtained, a multinomial logistic regression model is applied by regressing the three types of assurance providers on firm size, leverage, profit, liquidity, percentage of strategic shareholding and two control variables – country and year. Findings: The results indicate that the choice of sustainability assurance provider is related to firm size, profitability, liquidity and country. Research limitations/implications: There may be relevant variables omitted from the empirical analysis; results of this study may not be able to be generalized beyond the sample selected; and the sample size is relatively small. Practical implications: Sustainability assurance is a viable assurance service that the accounting profession can provide. Originality/value: This study helps in identifying the types of firms that are likely to demand assurance services provided by accounting firms.