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.

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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
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article

Carbon accounting quality: Measurement and the role of assurance

Shawn Shi, Brandon Gipper, Fiona Sequeira
Journal of Accounting and Economics
Corporate Social Responsibility Reporting
article

Carbon accounting quality: Measurement and the role of assurance

Shawn Shi, Brandon Gipper, Fiona Sequeira
article en

Abstract

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.

Journal of Accounting and EconomicsVol. 81(2)
University of Notre Dame (US), Ross University School of Medicine (BB), Stanford University (US)
Openalex Percentile: Top 50%
Corporate Social Responsibility Reporting
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Carbon accounting quality: Measurement and the role of assurance — Shawn Shi, Brandon Gipper, et al. · Journal of Accounting and Economics (2025) | TGRS Research Map | TGRS