The Value Relevance of Environmental Audits: Evidence from Japan

  • Japanese Environmental Audits and Firm Performance
  • Ki-Hoon Lee, Bum-Jin Park, Hakjoon Song, Keun-Hyo Yook
  • Business Strategy and the Environment, December 2016, Wiley
  • DOI: 10.1002/bse.1940

The Value Relevance of Environmental Audits

What is it about?

We examine whether firms’ environmental audits positively affect their market values and whether third-party assurance strengthens positive effects, using value relevance theory as a theoretical foundation.

Why is it important?

Environmental audits are implemented internally in order to monitor compliance with environmental laws, regulations and related accounting rules, and to develop recommendations for ways in which to improve environmental accounting processes and performance. In addition, external third-party assurance on environmental information is used to verify whether firms’ disclosures on environmental information are in compliance with environmental accounting rules and regulations.


Professor Bumjin Park
Soonchunhyang University

In light of our results, corporate managers should support the use of environmental audits and third-party assurance to facilitate greater confidence in the minds of corporate decision makers, investors, shareholders and other stakeholders.

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The following have contributed to this page: Professor Bumjin Park

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