Carbon accounting quality: Measurement and the role of assurance
We examine whether external assurance improves the quality of firms’ carbon accounting. We develop a measure of carbon accounting quality based on the deviation of reported emissions from a model-based expected level and supplement it with two survey-based measures. We show that assurance is associated with higher carbon accounting quality. This association is stronger when firms have weaker pre-existing carbon accounting systems and when assurance is more thorough. Consistent with assurance enhancing quality, assurance relates to the identification of issues in a firm’s carbon accounting system, along with fewer omissions and more revisions of prior disclosures. Exploiting mandated assurance for non-financial reporting in three E.U. countries, we show that firms experience post-regulation increases in carbon accounting quality. Together, the findings highlight the importance of assurance for reporting firms that are improving their carbon accounting quality.
Authors
- Shawn Shi (ORCID: https://orcid.org/0000-0002-1490-1972)
- Brandon Gipper (ORCID: https://orcid.org/0000-0002-7111-6882)
- Fiona Sequeira
Institutions
- University of Notre Dame (US)
- Ross University School of Medicine (BB)
- Stanford University (US)
Publication Details
- Journal
- Journal of Accounting and Economics
- Published
- 2025-11-20
- DOI
- https://doi.org/10.1016/j.jacceco.2025.101849
- Primary Topic
- Corporate Social Responsibility Reporting
- Type
- article
- Field-Weighted Citation Impact
- 0.00