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Comparing Auditors’ and Users’ Materiality Judgments for ESG and Traditional Financial Disclosures: The Roles of Disclosure Form and Valence

Marcus M. Doxey & Chezham L. Sealy

Auditing: A Journal of Practice and Theory2025https://doi.org/10.2308/ajpt-2024-076article
AJG 3ABDC A*
Weight
0.37

Abstract

SUMMARY As voluntary assurance over corporate ESG disclosures expands and regulators begin to mandate ESG assurance, understanding the factors influencing ESG materiality assessments can help auditors more effectively assure ESG information. ESG disclosures serve different purposes than financial disclosures and include more positive and qualitative information. We use an experiment to compare professional assurance providers’ and users’ materiality assessments for ESG versus traditional financial disclosures. Results indicate that varying decision context (ESG versus financial), information valence (positive versus negative), and form (qualitative versus quantitative) affects the auditor-user materiality gap. Specifically, we document the materiality gap widening for qualitative and positive disclosures and ESG disclosures generally. Although current ESG materiality guidelines focus on topical materiality, this study documents evidence of other important, theory-based disclosure features that influence materiality judgments. Data Availability: Contact the authors. JEL Classifications: M41; M42; G41; M14.

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https://doi.org/https://doi.org/10.2308/ajpt-2024-076

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@article{marcus2025,
  title        = {{Comparing Auditors’ and Users’ Materiality Judgments for ESG and Traditional Financial Disclosures: The Roles of Disclosure Form and Valence}},
  author       = {Marcus M. Doxey & Chezham L. Sealy},
  journal      = {Auditing: A Journal of Practice and Theory},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/ajpt-2024-076},
}

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Comparing Auditors’ and Users’ Materiality Judgments for ESG and Traditional Financial Disclosures: The Roles of Disclosure Form and Valence

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.