for improving and maintaining the quality of the sustainability report.
A main factor that affects the corporate decision to contract with a certain assuror/auditor to assure its sustainability
report is the fees that the company must pay to that assuror
to complete his job. Producing a high-quality sustainability
report is expensive and requires resources consumption of
which the company has to incur costs for aggregating,
measuring, and verifying the information as well as costs for
publishing and printing. Several companies are reluctant to
incur high costs and thus affects negatively on the quality of
the sustainability report produced. However, eventually
incurring high costs for producing and assuring a qualified
sustainability report will retain the company’s legitimacy for
the stakeholders and consequently this legitimacy will positively affect the financial position of the company. In which,
customers will be willing to purchase the company products
that they trust, investors will be willing to purchase the
company stocks and the company will not face any penalties
or fines for violating the regulations (Comyns et al. 2013;
Latridis 2013; Lozano 2013; Lamberton 2005;
Fernandez-Feijoo et al. 2016). Highly qualified disclosures
in the corporate reports lead to the improvement of the
aggregate social welfare through reducing the costs incurred
by the society searching for information about the corporate
performance. Furthermore, online reporting is a cost-efficient
way for reporting as it is cheaper than the hard copy
reporting that requires printing and distribution costs. As the
level of information asymmetry between the report reader
and the company increases, the cost of preparing the report
decreases. There is no need to incur high costs by the
companies to improve the report quality to gain the legitimacy of the readers, who receive corporate information
through private channels, other than the formal published
report. The cost that the organization bears to provide its
stakeholders with a comprehensive sustainability report
comprises all costs paid for both the preparation and communication of the sustainability report. These costs include
all the monetary amounts paid for the preparation process,
which in turn includes the costs of collecting, measuring,
verifying, and aggregating the information, together with all
the monetary amounts paid for the communication process,
which in turn includes the costs of printing and publishing
the sustainability report (Comyns et al. 2013; Lamberton
2005; Rowbottom and Lymer 2009; Brown and Hillegeist
2007). Therefore, incurring costs for producing, as well as
assuring sustainability reports is faced with firm’s resistance,
which will negatively affect the quality of the report and the
corporate legitimacy.
Based on the literature reviewed, it can be concluded that
the assurance of report is considered as an essential factor
and driver that should be considered for improving and
maintaining the quality of SR. Therefore, the audit by a third
independent party of the sustainability report can act as a
guarantee for reliability and accountability of the corporate
report. Thus, the research hypothesis generated for testing is:
H: That Assurance of the Sustainability Report (ASR) has
a significant impact on the Quality of the Sustainability
Reporting (QSR).
6 Research Design and Methodology
6.1 Methodological Theory
As the research is following the Pragmatic Approach, the
research chooses the most appropriate techniques that can
best answer the research question in the most effective and
efficient way. This entails specifying the research structure
before pursuing the empirical part of the research. In which,
the research question is predetermined while introducing the
research problem. Moreover, the research design is accurately preplanned before starting the empirical part that will
use mostly well-structured data. The research data are tightly
structured using quantitative measures before starting the
data collection process. One of the significant benefits of
having a well-structured research design in advance of the
empirical part is that the more tightly structured the research
design and in turn the research data, the more likely there
will be a well-developed conceptual framework. The
research is following the Positivism Philosophy, with
essentially a Deductive Approach, in which the research
aims at verifying an existed theory, i.e., Legitimacy Theory,
through testing objective data, in order to finally reach
law-like generalizations that develop knowledge. It has been
historically observed that the Positivism philosophy has
dominated the science. This philosophy studies knowledge
using free-value quantitative measures where if used by
different researches will give the same results. Based on that,
a scientific method is applied that empirically tests hypothesis using a large sample of mostly structured quantitative
data. Unlike other research philosophies, i.e., realism,
interpretivism and pragmatism, the research will not be
affected by any subjective issues so that the researcher’s
values or other surrounding viewpoints will not influence the
research procedures held (Punch 2014; Hinton and
McMurray 2017; Saunders and Tosey 2013). Since the
research question is “What is the Factor(s) affecting…?”
which is a quantitative question, therefore the research
applies a Mono Quantitative Design that is best convenient
to answer this question. Documentation is used to extract the
required data that is tested longitudinally over subsequent
periods. Documentation is characterized by the accuracy,
reliability and verifiability of the extracted data, in which it is
less likely to involve bias and subjective values or
The Assurance of Sustainability Reporting …
191
A main factor that affects the corporate decision to contract with a certain assuror/auditor to assure its sustainability
report is the fees that the company must pay to that assuror
to complete his job. Producing a high-quality sustainability
report is expensive and requires resources consumption of
which the company has to incur costs for aggregating,
measuring, and verifying the information as well as costs for
publishing and printing. Several companies are reluctant to
incur high costs and thus affects negatively on the quality of
the sustainability report produced. However, eventually
incurring high costs for producing and assuring a qualified
sustainability report will retain the company’s legitimacy for
the stakeholders and consequently this legitimacy will positively affect the financial position of the company. In which,
customers will be willing to purchase the company products
that they trust, investors will be willing to purchase the
company stocks and the company will not face any penalties
or fines for violating the regulations (Comyns et al. 2013;
Latridis 2013; Lozano 2013; Lamberton 2005;
Fernandez-Feijoo et al. 2016). Highly qualified disclosures
in the corporate reports lead to the improvement of the
aggregate social welfare through reducing the costs incurred
by the society searching for information about the corporate
performance. Furthermore, online reporting is a cost-efficient
way for reporting as it is cheaper than the hard copy
reporting that requires printing and distribution costs. As the
level of information asymmetry between the report reader
and the company increases, the cost of preparing the report
decreases. There is no need to incur high costs by the
companies to improve the report quality to gain the legitimacy of the readers, who receive corporate information
through private channels, other than the formal published
report. The cost that the organization bears to provide its
stakeholders with a comprehensive sustainability report
comprises all costs paid for both the preparation and communication of the sustainability report. These costs include
all the monetary amounts paid for the preparation process,
which in turn includes the costs of collecting, measuring,
verifying, and aggregating the information, together with all
the monetary amounts paid for the communication process,
which in turn includes the costs of printing and publishing
the sustainability report (Comyns et al. 2013; Lamberton
2005; Rowbottom and Lymer 2009; Brown and Hillegeist
2007). Therefore, incurring costs for producing, as well as
assuring sustainability reports is faced with firm’s resistance,
which will negatively affect the quality of the report and the
corporate legitimacy.
Based on the literature reviewed, it can be concluded that
the assurance of report is considered as an essential factor
and driver that should be considered for improving and
maintaining the quality of SR. Therefore, the audit by a third
independent party of the sustainability report can act as a
guarantee for reliability and accountability of the corporate
report. Thus, the research hypothesis generated for testing is:
H: That Assurance of the Sustainability Report (ASR) has
a significant impact on the Quality of the Sustainability
Reporting (QSR).
6 Research Design and Methodology
6.1 Methodological Theory
As the research is following the Pragmatic Approach, the
research chooses the most appropriate techniques that can
best answer the research question in the most effective and
efficient way. This entails specifying the research structure
before pursuing the empirical part of the research. In which,
the research question is predetermined while introducing the
research problem. Moreover, the research design is accurately preplanned before starting the empirical part that will
use mostly well-structured data. The research data are tightly
structured using quantitative measures before starting the
data collection process. One of the significant benefits of
having a well-structured research design in advance of the
empirical part is that the more tightly structured the research
design and in turn the research data, the more likely there
will be a well-developed conceptual framework. The
research is following the Positivism Philosophy, with
essentially a Deductive Approach, in which the research
aims at verifying an existed theory, i.e., Legitimacy Theory,
through testing objective data, in order to finally reach
law-like generalizations that develop knowledge. It has been
historically observed that the Positivism philosophy has
dominated the science. This philosophy studies knowledge
using free-value quantitative measures where if used by
different researches will give the same results. Based on that,
a scientific method is applied that empirically tests hypothesis using a large sample of mostly structured quantitative
data. Unlike other research philosophies, i.e., realism,
interpretivism and pragmatism, the research will not be
affected by any subjective issues so that the researcher’s
values or other surrounding viewpoints will not influence the
research procedures held (Punch 2014; Hinton and
McMurray 2017; Saunders and Tosey 2013). Since the
research question is “What is the Factor(s) affecting…?”
which is a quantitative question, therefore the research
applies a Mono Quantitative Design that is best convenient
to answer this question. Documentation is used to extract the
required data that is tested longitudinally over subsequent
periods. Documentation is characterized by the accuracy,
reliability and verifiability of the extracted data, in which it is
less likely to involve bias and subjective values or
The Assurance of Sustainability Reporting …
191