Estibaliz Goicoechea

We examine whether expected returns in top- and bottom-ESG portfolios are systematically related to European financing (FIN) and Post-Earnings Announcement Drift (PEAD) factors. In the full-sample specification, bottom-ESG portfolios exhibit negative exposure to the FIN factor, whereas top-ESG portfolios do not show statistically significant loadings on either FIN or PEAD. Mispricing dynamics vary across market states. During bear markets, bottom-ESG portfolios also display negative exposure to the PEAD factor, indicating a stronger relation to earnings-related mispricing in downturns. When conditioning on ESG-specific uncertainty, the difference in FIN exposure between top- and bottom-ESG portfolios widens, while PEAD remains largely insignificant across regimes. Around the Paris Agreement, ESG portfolios display a more differentiated pattern of factor exposure, particularly through the financing-related channel captured by FIN.

We examine whether expected returns in top- and bottom-ESG portfolios are systematically related to European financing (FIN) and Post-Earnings Announcement Drift (PEAD) factors. In the full-sample specification, bottom-ESG portfolios exhibit negative exposure to the FIN factor, whereas top-ESG portfolios do not show statistically significant loadings on either FIN or PEAD. Mispricing dynamics vary across market states. During bear markets, bottom-ESG portfolios also display negative exposure to the PEAD factor, indicating a stronger relation to earnings-related mispricing in downturns. When conditioning on ESG-specific uncertainty, the difference in FIN exposure between top- and bottom-ESG portfolios widens, while PEAD remains largely insignificant across regimes. Around the Paris Agreement, ESG portfolios display a more differentiated pattern of factor exposure, particularly through the financing-related channel captured by FIN.

La información sobre sostenibilidad y su credibilidad son objeto de un interés internacional creciente. La actual Directiva 2014/95/UE de información no financiera va a ser sustituida por la Directiva de información corporativa en materia de sostenibilidad con el objetivo de mejorar la comparabilidad, relevancia y credibilidad de la información no financiera reportada en el entorno europeo. En el presente artículo analizamos ambas Directivas, otras iniciativas internacionales en materia de información sobre sostenibilidad, así como la situación presente y futura de la verificación de dicha información. Además, proponemos un informe de auditoría novedoso para la información no financiera basado en una encuesta a auditores y usuarios en España. Nuestra propuesta puede mejorar la comunicación entre auditores y usuarios y favorecer la confianza de los grupos de interés en la información sobre sostenibilidad reportada. Recibido: 30 abril 2022Aceptado: 30 mayo 2022

Audit reports represent the only information stakeholders have about conducted audits and they are a key instrument used in economic and financial decisions. Improving audit reports should be a priority of regulators and auditors. The authors solicited perceptions from 212 experienced auditors and financial report users about the value of audit reports and ways to improve their format and content. An analysis of the responses suggests that adding information on audits (such as auditor’s responsibility about fraud) and on annual accounts and client’s information systems, without significant changes in the format, would improve the decision usefulness of audit reports. The growing sophistication of markets and reporting standards requires new information in audit reports, such as auditors’ conclusions about management’s estimates in annual accounts. The study is useful to regulators, auditors’ corporations, academics, and users and contributes to the current audit literature by providing evidence on consensus between auditors and users with regard to the format and content of audit reports.

Integrated reporting is a key instrument used to inform stakeholders about the sustainability issues of a company. Only an assured report can effectively instill confidence in its users regarding the sustainability of the company. Based on the International Integrated Reporting Framework issued by the International Integrated Reporting Council (IIRC), the authors solicited perceptions from auditors and audit report users about several aspects of integrated reporting assurance. An analysis of the responses suggests that integrated reporting assurance is important, but there are many challenges (both methodological and related to the characteristics of non-financial information) for auditors to overcome. Reporting companies and auditors must work to overcome these problems. The former ones must improve the quality of non-financial information and the later must adapt their audit procedures. This paper provides valuable insights into preferences regarding the form and content of the audit report on integrated reporting. This study is useful to regulators of audit activity, auditors’ corporations, the IIRC, and other international associations, academics, and audit report users, and contributes to the current integrated reporting literature by examining the perceptions of auditors and users regarding the assurance of integrated reporting. Integrated reporting assurance is still an under-explored field of research.

El futuro modelo de información corporativa. ¿Deben opinar los auditores sobre el informe integrado?