Restatement of CSR Reports: Frequency, Magnitude, and Determinants

Posted: 8 Feb 2021

See all articles by Matt Pinnuck

Matt Pinnuck

University of Melbourne - Department of Accounting and Business Information Systems

Ajanee Ranasinghe

Tilburg University

Naomi S. Soderstrom

University of Melbourne

Joey Zhou


Multiple version iconThere are 2 versions of this paper

Date Written: December 17, 2020


We provide the first direct analysis of the magnitude of unreliable quantitative information disclosed in corporate social responsibility (CSR) reports. CSR report reliability is of particular interest to fund managers for investment decisions as well as to policymakers for regulating and monitoring purposes. However, surprisingly little is known about CSR reporting reliability despite concerns raised in the prior literature (e.g., Laufer 2003; O’Dwyer 2002), We examine how often CSR reports for the Global Fortune 250 (G250) are restated, the magnitude of restatements, and factors associated with restatements during the period 2006 to 2013. During this sample period, the occurrence of restatements increased monotonically, with 39% of G250 CSR reports including one or more line-item restatements. The magnitude of the line-item restatements is quite high, with a median restatement of about 10%. We also find evidence of bias in the revised items toward overstatement. We find that restatements occur more frequently in firms that have reported a high level of social performance and that have environmental targets. The occurrence of restatement is also positively associated with firms residing in strong law countries and having their CSR reports audited. Our analysis of reporting bias indicates a negative association between use of Global Reporting Initiative (GRI) reporting guidelines and the likelihood of an overstatement. We also find a positive association between having the CSR report audited and the likelihood of revisions associated with overstatements. Together, our exploratory results indicate that CSR information may be unreliable and firms that face pressure to perform well have more restatements. However, our evidence is consistent with the restatements resulting from improvements in information systems over time rather than intentional bias. Our findings will help investors and fund managers better judge the reliability of CSR disclosures, and inform regulators and standard setters on ways to enhance the reliability of CSR reporting. Finally, we contribute to the audit literature examining sustainability assurance.

Keywords: sustainability, CSR report, restatements

Suggested Citation

Pinnuck, Matthew and Ranasinghe, Ajanee and Soderstrom, Naomi S. and Zhou, Joey, Restatement of CSR Reports: Frequency, Magnitude, and Determinants (December 17, 2020). Contemporary Accounting Research, Forthcoming, Available at SSRN:

Matthew Pinnuck

University of Melbourne - Department of Accounting and Business Information Systems ( email )

Melbourne, Victoria 3010 3010

Ajanee Ranasinghe

Tilburg University ( email )

P.O. Box 90153
Tilburg, Noord-Brabant 5000 LE

Naomi S. Soderstrom (Contact Author)

University of Melbourne ( email )

Melbourne, 3010

Joey Zhou

Independent ( email )

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