the corporate stakeholders. It is also found that the SR of the
Islamic banks is inconsistent (Bebbington et al. 2008).
Briefly, it can be concluded that there is a wide agreement
among academics and practitioners on the poor quality of
SR. This leads the stakeholders to take improper decisions,
which in turn affect negatively on the corporate investment
opportunities, profitability, and market value. In accordance
with the Pragmatic-Based Approach of the research planning, the research question that evolves is that, “What is the
factor(s) affecting the quality of SR?” and that can be the
reason behind its poor quality. This question will be
answered through investigating that factor(s) and applying
proper methods to empirically test the proposed solution.
3 Research Objectives and Contribution
It is a fact that cannot be denied nowadays that the importance of SR is increasing by time. This importance is largely
emphasized in the corporate setting, which is extensively
claimed to hold most of the responsibility related to
achieving the sustainable development goals through being
sustainability oriented. Based on the research problem,
despite of the emphasized importance of SR, its poor-quality
level is dominating all over the world. The research aims to
provide an original contribution toward setting objective
criteria for evaluating the quality of sustainability reports.
Setting such an objective criterion contributes to the scientific knowledge by developing a robust measure (reporting)
for the degree of the sustainable development worldwide.
The research aims to identify/evaluate the effect of the
Assurance of Report (ASR) that is scientifically proposed in
the coming sections, through theory and practice, on the
quality of SR. In other words, the research aims at testing the
Causal Relationship between the assurance of report and the
quality of SR. This aim is achieved through the following
research objective: Testing, theoretically and empirically, the
impact of the Assurance of Report (ASR) on the quality of
Sustainability Reporting (SR).
4 Theoretical Basis
The main targeted contribution of the research is to assess
the effect of the assurance of the report on the quality of SR,
as considering that assurance as a factor that can improve the
quality of SR and consequently assists in developing a
conceptual framework for a qualified SR. A theoretical
framework is developed through the combination of a set of
interrelated concepts emerging from one or more theories.
Furthermore, relying on a theory allows for a robust evaluation of sustainability practices against predetermined criteria. In which, a theory is a set of constructs or factors that
can best describe and/or explains a certain phenomenon and
the reasons behind its occurrence (Fernando and Lawrence
2014; Miles 2012; Punch 2014). Proceeding from this,
Legitimacy Theory represents the justification for almost all
the sustainability disclosure practices implemented by
organizations. Consequently, the research objective, referred
to in the previous section, will be attempted while considering it through the Socio-Economic theory of “Legitimacy
Theory”. It provides the scientific justification for the corporate behavior of supplying a sustainability report to its
stakeholders who highly demand this reporting. Satisfying
the needs of the corporate stakeholders lead to gaining social
legitimacy and preserving corporate survival. Legitimacy
Theory is considered as the most common theoretical basis
applied in studies of environmental and social disclosures by
organizations (Fernando and Lawrence 2014; de Villiers and
van Staden 2006; Tilling 2004). In which, as being a
Socio-Economic theory, it considers the social issues related
to the organizational activities together with related economic issues, so that serving all corporate stakeholders, as
opposed to the purely economic theories focusing only on
economic activities, so that targeting only financially oriented corporate stakeholders. Moreover, legitimacy theory is
considered as the most comprehensive theory to ground the
SR, relative other theories that have been exposed in this
area, mainly the institutional theory and the stakeholders’
theory. Of which, the institutional theory states that an
institution can follow the best practices of SR followed by its
institutional peers, despite of overlooking the quality of the
provided reporting. The stakeholders’ theory states that a
firm should not give all the consideration to the shareholders
but to all its stakeholders. From one side, legitimacy theory
overcomes the main criticism of the institutional theory by
focusing the quality of the provided report to maintain corporate legitimacy while keeping an institution being competitive with its peers to preserve its continuity. From the
other side, it achieves the main objective of the stakeholders’
theory of fulfilling the needs of all the corporate stakeholders
rather than the shareholders only by providing a comprehensive sustainability information (Fernandez-Feijoo et al.
2016; Samudhram et al. 2016). Therefore, legitimacy theory
provides the most robust theoretical basis for justifying the
corporate behavior toward its SR practices.
The Assurance of Sustainability Reporting …
189
Islamic banks is inconsistent (Bebbington et al. 2008).
Briefly, it can be concluded that there is a wide agreement
among academics and practitioners on the poor quality of
SR. This leads the stakeholders to take improper decisions,
which in turn affect negatively on the corporate investment
opportunities, profitability, and market value. In accordance
with the Pragmatic-Based Approach of the research planning, the research question that evolves is that, “What is the
factor(s) affecting the quality of SR?” and that can be the
reason behind its poor quality. This question will be
answered through investigating that factor(s) and applying
proper methods to empirically test the proposed solution.
3 Research Objectives and Contribution
It is a fact that cannot be denied nowadays that the importance of SR is increasing by time. This importance is largely
emphasized in the corporate setting, which is extensively
claimed to hold most of the responsibility related to
achieving the sustainable development goals through being
sustainability oriented. Based on the research problem,
despite of the emphasized importance of SR, its poor-quality
level is dominating all over the world. The research aims to
provide an original contribution toward setting objective
criteria for evaluating the quality of sustainability reports.
Setting such an objective criterion contributes to the scientific knowledge by developing a robust measure (reporting)
for the degree of the sustainable development worldwide.
The research aims to identify/evaluate the effect of the
Assurance of Report (ASR) that is scientifically proposed in
the coming sections, through theory and practice, on the
quality of SR. In other words, the research aims at testing the
Causal Relationship between the assurance of report and the
quality of SR. This aim is achieved through the following
research objective: Testing, theoretically and empirically, the
impact of the Assurance of Report (ASR) on the quality of
Sustainability Reporting (SR).
4 Theoretical Basis
The main targeted contribution of the research is to assess
the effect of the assurance of the report on the quality of SR,
as considering that assurance as a factor that can improve the
quality of SR and consequently assists in developing a
conceptual framework for a qualified SR. A theoretical
framework is developed through the combination of a set of
interrelated concepts emerging from one or more theories.
Furthermore, relying on a theory allows for a robust evaluation of sustainability practices against predetermined criteria. In which, a theory is a set of constructs or factors that
can best describe and/or explains a certain phenomenon and
the reasons behind its occurrence (Fernando and Lawrence
2014; Miles 2012; Punch 2014). Proceeding from this,
Legitimacy Theory represents the justification for almost all
the sustainability disclosure practices implemented by
organizations. Consequently, the research objective, referred
to in the previous section, will be attempted while considering it through the Socio-Economic theory of “Legitimacy
Theory”. It provides the scientific justification for the corporate behavior of supplying a sustainability report to its
stakeholders who highly demand this reporting. Satisfying
the needs of the corporate stakeholders lead to gaining social
legitimacy and preserving corporate survival. Legitimacy
Theory is considered as the most common theoretical basis
applied in studies of environmental and social disclosures by
organizations (Fernando and Lawrence 2014; de Villiers and
van Staden 2006; Tilling 2004). In which, as being a
Socio-Economic theory, it considers the social issues related
to the organizational activities together with related economic issues, so that serving all corporate stakeholders, as
opposed to the purely economic theories focusing only on
economic activities, so that targeting only financially oriented corporate stakeholders. Moreover, legitimacy theory is
considered as the most comprehensive theory to ground the
SR, relative other theories that have been exposed in this
area, mainly the institutional theory and the stakeholders’
theory. Of which, the institutional theory states that an
institution can follow the best practices of SR followed by its
institutional peers, despite of overlooking the quality of the
provided reporting. The stakeholders’ theory states that a
firm should not give all the consideration to the shareholders
but to all its stakeholders. From one side, legitimacy theory
overcomes the main criticism of the institutional theory by
focusing the quality of the provided report to maintain corporate legitimacy while keeping an institution being competitive with its peers to preserve its continuity. From the
other side, it achieves the main objective of the stakeholders’
theory of fulfilling the needs of all the corporate stakeholders
rather than the shareholders only by providing a comprehensive sustainability information (Fernandez-Feijoo et al.
2016; Samudhram et al. 2016). Therefore, legitimacy theory
provides the most robust theoretical basis for justifying the
corporate behavior toward its SR practices.
The Assurance of Sustainability Reporting …
189