Old Saddles for New Horses: How Non-Financial Assurance Reinforces Traditional Firm Boundaries

41 Pages Posted: 30 Sep 2022 Last revised: 26 Jul 2023

See all articles by Judith C. Stroehle

Judith C. Stroehle

University of St Gallen

Kazbi Soonawalla

University of Oxford - Said Business School

Date Written: September 26, 2022

Abstract

In the absence of legally binding frameworks and standards, research has shown that the assurance of non-financial information has developed as an analogy of financial auditing, copying its processes, logics and methods. We study the consequences of this analogy through an in-depth study of hand collected data of FTSE100 sustainability reporting and assurance. We view non-financial assurance statements as discursive tools of boundary work and find that the financial audit logics in non-financial assurance reinforce rather than challenge traditional firm boundaries. We identify three mechanisms of boundary work that are responsible for this: a) stakeholder exclusion due to firm and management centricity, b) issue exclusion (exclusion of certain topics) due to conservatism in practice and measurement, and c) a limited audit scope due to methodological and professional constraints. We argue that this stands in sharp contrast to calls for problem-oriented, impact-focussed and inclusive approaches to sustainability measurement. Non-financial assurance in its current design is therefore not appropriate to give a true and fair view of the types of information needed to reflect the complex, dynamic and interdependent nature of the grand sustainability challenges.

Keywords: assurance, auditing, sustainability, non-financial information, boundary work

Suggested Citation

Stroehle, Judith and Soonawalla, Kazbi, Old Saddles for New Horses: How Non-Financial Assurance Reinforces Traditional Firm Boundaries (September 26, 2022). Available at SSRN: https://ssrn.com/abstract=4230387 or http://dx.doi.org/10.2139/ssrn.4230387

Judith Stroehle (Contact Author)

University of St Gallen ( email )

Müller-Friedberg-Strasse 6/8
St. Gallen, 9000
Switzerland

Kazbi Soonawalla

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

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