Corporate choice of providers of voluntary carbon assurance

This study investigates corporate incentives for the choice of assurance providers of accounting firms versus nonaccounting firms. Based on an international sample of 3,635 firm-year observations for the period of 2010-2014, we find that firms subject to greater legitimacy and stakeholder pressure (e.g., those with higher carbon emissions in countries with stringent climate protection and stakeholder-orientation) are more likely to choose accounting firms as their assurance provider. We also find supporting evidence that firms with a desire to improve carbon management mechanisms (e.g., firms that adopt carbon reduction incentives with higher carbon transparency) show a tendency to choose consulting firms specializing in climate change management. The overall findings suggest that the choice of assurance provider is a strategic decision, which aligns with a firm's overall corporate social responsibility goal. Our results should help practitioners, managers, and regulators understand the emerging audit practice and market.