Impact of the joint provision of audit and non-audit services on the quality of external assurance of sustainability disclosures

Abstract External assurance of sustainability disclosures plays a fundamental role in verifying the reliability and integrity of corporate information and is provided by independent professionals. This study aims to investigate the impact of the joint provision of audit and non-audit services on the quality of external assurance. Using a panel dataset of Brazilian listed companies that assured their sustainability disclosures between 2012 and 2021, we specifically examined the effect of experience and technical competence derived from traditional financial audit services on the quality of external assurance of sustainability disclosures. The results indicate that the joint provision of these services has a negative impact on the quality of external assurance, suggesting that conflicts of interest between the audit firm and the reporting company may compromise the independence of the assurance provider. This study contributes to the existing literature by providing evidence that supports the critical perspective on the voluntary adoption of external assurance of sustainability disclosures, a topic that has been scarcely explored nationally. In addition, it has significant practical implications for accounting professionals and regulators by promoting discussions on the need to develop specific norms and standards that improve the quality of external assurance of sustainability, as well as to improve professional knowledge in sustainability.