CREDIBILITY OF SUSTAINABILITY REPORTS OF MINING SECTOR COMPANIES IN AUSTRALIA: AN INVESTIGATION OF EXTERNAL ASSURANCE

The recent trend towards company's responsibility for social, environmental and economic performance has resulted in sustainability reporting in varying levels. Even though there is a growing trend towards sustainability reporting which is of voluntary nature, not much attention is given to the credibility of such information through external assurance. The paper investigates the extent of sustainability reporting in the mining sector companies in Australia and their assurance practices. The annual reports were examined for top 100 ASX listed companies in the mining sector in Australia for 2013-2014. This study identified 18% of companies had a sustainability report, however, only 44% of the sustainability reports were audited either by accountants or independent assurance providers. However, majority of the companies (62.5%) were assured by accountants. Criteria used for assurance varied resulting in providing limited assurance by majority of the assurance providers. This study showed that there is variability in assurance practices for sustainability reports. Companies also used various assurance standards, as there were no universally accepted assurance standards for non-financial reporting. One of the major limitations for this variability is the lack of standardized indicators. This study shows that there is a need to develop generally acceptable criteria for assurance of non-financial information in sustainability reports. The criteria that can be applied by assurance providers would be a significant contribution for auditing profession and independent providers as well as standard setters, which will provide credible information for users of such information. This paper identified the importance of acceptable criteria for assurance of non-financial information in sustainability reports for companies in the mining sector which are considered to have greater environmental and social impact.