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The paper examines the factors that influence the selection of a sustainability assurance standard. Additionally, it examines the link between assurance standards and firm performance. Four categories for the selection of an assurance standard are deployed. Effect estimates in models are based on data obtained from GRI. The sample consists of 4372 assured companies from the years 2009–2015, most companies (90.19%) are headquartered outside the US. Both multinomial and multilevel logistic regression models are utilized to determine the factors that are associated with the selection of sustainability assurance standards. Results show that the type of assurance provider is significantly related to the choice of a sustainability assurance standard. Additionally, firms choose to seek assurance and use either AA1000 assurance and/or ISAE3000 despite the negative returns shown by Tobin’s Q, Raw Returns, Market-Adjusted Returns, and Size-Adjusted Returns. Understanding why certain assurance standards are selected will help auditors shed light on the sustainability assurance process and provide a benchmark for making improvements. For investors, the assurance standards selected will provide a signal of whether assurance provided was for quantitative or qualitative information or both in the sustainability area. This, in turn, will affect investor interest in the companies and have an impact on their valuation. This is the first study to examine a setting where there is more than one assurance standard available. Furthermore, it also examines the influence of using assurance standards on yearly returns.
Rao et al. (Sat,) studied this question.