Risk in Sustainability Reporting: Designing a DEMATEL-Based Model for Enhanced Transparency and Accountability

Ahmadreza Kazemi, Sasan Mehrani () and Saeid Homayoun ()
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Ahmadreza Kazemi: Department of Accounting and Finance, University of Tehran, Aras International Campus, Tehran 1417763133, Iran
Sasan Mehrani: Department of Accounting and Auditing, Faculty of Accounting and Finance, College of Management, University of Tehran, Tehran 1411713114, Iran
Saeid Homayoun: Department of Business and Economic Studies, University of Gävle, 80176 Gävle, Sweden

Sustainability, 2025, vol. 17, issue 2, 1-19

Abstract: The primary concern of research in the area of fraud risk relevant to sustainability reporting lies in understanding the potential for fraudulent or misleading reporting practices and developing strategies and tools to identify and prevent such behaviors. Taking into consideration that significant research has yet to be conducted on fraud risk models associated with sustainability reporting, this study represents an innovative contribution. It uses a mixed-methods approach to design a fraud risk model based on sustainability reporting. Given its type and approach, this research does not posit any hypotheses involving thematic analysis and the Decision-Making Trial and Evaluation Laboratory (DEMATEL) method. This study is exploratory and applied, aiming to design a model through a mixed-methods methodology. Therefore, the research is hypothesis-free and instead utilizes a qualitative sample of experts and academics in the field of accounting from Iran and Denmark. The DEMATEL technique identifies key external and internal factors that significantly impact sustainability reporting, including comprehensive internal controls, strong governance and oversight, training and awareness, the utilization of technology, and data analytics. The influence of stakeholders, third-party audits, and the credibility of sustainability reports emerges as particularly significant in this context, exceeding the impact of other factors. These findings underscore that stakeholders, third-party audits, and report credibility to play a more prominent role in shaping sustainability performance compared to other considerations. This would imply that such variables remain key drivers in the perceptiveness and effectiveness of sustainability performance.

Keywords: fraud risk; sustainability reporting; DEMATEL; International Sustainability Standards Board (ISSB) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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