How does the EU non‐financial directive affect the assurance market?

Abstract

[EN] The objective of this paper was to determine the impact produced by Directive2014/95/EU on companies’ decisions regarding the assurance of non-financial infor-mation statements and the quality parameters under which this service is contracted.Following an analysis based on institutional theory, the results obtained for the re-ports issued by an international sample of 600 multinational companies in the period2011–2018 show that the institutional pressures associated with this Directive con-tributed to an expansion of the assurance market, although they had only a moderateimpact on the contractual conditions of the service. Complementary analyses sug-gest that the adoption of a limited scope in these assurance services may reflect theconservative outlook of auditors, as providers whose service is favoured in the newscenario. Additionally, we find that the influence of this legal framework is different inthe United Kingdom from that in the other European countries. The research contrib-utes to the literature by offering a novel understanding of the behaviour of assuranceproviders and of the quality of the service obtained.