Assuring a New Market: The Interplay between Country-Level and Company-Level Factors on the Demand for Greenhouse Gas (GHG) Information Assurance and the Choice of Assurance Provider

SUMMARY The need for credible emissions reporting has created international demand for a new and specific type of assurance engagement: assurance of greenhouse gas (GHG) emissions information. This study provides an examination of the international GHG assurance market to identify key potential determinants of both the decision to assure and the choice of assurance provider. As well as providing details on this new assurance service, we extend current knowledge by undertaking a multilevel analysis of both country-level (stakeholder orientation and strength of legal system) and company-level (corporate governance) variables. After correcting for potential self-selection bias, our results reveal significant variations in country patterns for both of these decisions, with both the demand for GHG assurance services and the preference for an accounting profession assurance provider found to be higher in countries with a stakeholder orientation and a less stringent legal enforcement system. Further, we find company-level corporate governance systems and processes to be a significant moderator of the country-level factors for both decisions. JEL Classifications: M42.