 The Value Relevance of Environmental Audits: Evidence from JapanKi‐Hoon Lee, Bum‐Jin Park, Hakjoon Song and Keun‐Hyo Yook Business Strategy and the Environment, 2017, vol. 26, issue 5, 609-625 Abstract: Environmental audits are implemented internally in order to monitor compliance with environmental laws, regulations and related accounting rules, and to develop recommendations for ways in which to improve environmental accounting processes and performance. In addition, external third‐party assurance on environmental information is used to verify whether firms’ disclosures on environmental information are in compliance with environmental accounting rules and regulations. We examine whether firms’ environmental audits positively affect their market values and whether third‐party assurance strengthens positive effects, using value relevance theory as a theoretical foundation. Our main tests are based on 266 Japanese manufacturing firms’ published environmental reports for the period 2010–2013. We find that the average market value of firms that implement environmental audits is 9 percent greater than those that do not. Further, we find that environmental audits positively affect firm value, largely through interaction with third‐party assurance. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment Date: 2017 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:bstrat:v:26:y:2017:i:5:p:609-625 Ordering information: This journal article can be ordered from Access Statistics for this article Business Strategy and the Environment is currently edited by Richard Welford More articles in Business Strategy and the Environment from Wiley Blackwell |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.