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This is a Experimental Study study.

October 8, 2025Accounting and Finance1 citationsOpen Access

The Impacts of Disclosing Internal Controls, Board Oversight and Assurance by Different Types of External Assurers on Investors' Use of Sustainability Information

PSPaul SakchuenyosDeakin University ETEka Nugraha TanDeakin University PLPei‐Jia LumDeakin University

Key Points

Disclosing internal controls and engaging accounting assurers increases sustainability information credibility.
Investors prefer accounting assurers, but have independence concerns if they belong to the financial auditor's firm.
The positive impact of internal control disclosures is consistent among both accounting and non-accounting assurers.
Findings offer guidance for regulators and practitioners on enhancing investor trust in sustainability information.

Abstract

ABSTRACT This study uses a 2 × 3 experiment with Australian investors to examine how disclosing internal controls and board oversight (ICBO) and engaging different types of external assurers affect perceived credibility of sustainability information. We find that both disclosing ICBO and engaging an accounting assurer enhance investors' perceived credibility and willingness to invest. However, the positive effect of ICBO disclosures does not differ between non‐accounting and accounting assurers. Further, investors value accounting assurers' expertise but express independence concerns when the assurer is from the financial statement auditor's firm. These findings provide insights for standard‐setters, regulators and practitioners in identifying appropriate credibility‐enhancing mechanisms.

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