Does CSR Assurance Affect the Relationship between CSR Performance and Financial Performance?

Jintae Kim, Kangho Cho and Cheong K. Park
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Jintae Kim: Da Vinci College, Chung-Ang University, Gyeonggi-do 17546, Korea
Kangho Cho: Whitman School of Management, Syracuse University, Syracuse, NY 13244, USA
Cheong K. Park: School of Business, Woodbury University, Burbank, CA 91504, USA

Sustainability, 2019, vol. 11, issue 20, 1-12

Abstract: In this study, we investigate the effect of assurance service of corporate social responsibility (CSR) reports on the relationship between CSR performance and firms’ financial performance. Specifically, we question whether firms having their CSR performance assured to benefit from such assurance services. Theory suggests that investors apply a lower discount rate when valuing firms if information from the firms is credible. Using a sample of 5040 large U.S. companies, we find that the CSR performance is positively associated with the firms’ financial performance on average and that there is a significant effect of CSR assurance service on the relationship between CSR performance and firms’ financial performance. This implies that firms having their CSR reports assured by external experts experience much higher financial performance than firms without such assurance service. Our findings are consistent with the prior studies and support our argument with regard to the CSR assurance service. The findings have implications for firms considering CSR assurance and accounting professionals for their opportunities.

Keywords: CSR assurance; CSR performance; financial performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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