Auditor sustainability focus and client sustainability reporting

We examine the relationship between auditors' sustainability focus and their clients' sustainability reporting. Sustainability reporting is of increasing social and regulatory interest following SEC guidance on the provision of sustainability disclosures. Auditors can bridge the gap between a myriad of technical guidance and their clients. Positive assortative matching could occur between clients who plan to increase their sustainability reporting and auditors who have a greater sustainability focus, with sustainability alignment comprising part of client strategy for credibly reporting sustainability information. Specifically, we examine auditor-client sustainability alignment through the association between relative auditor sustainability focus and their clients' sustainability disclosures and activities. We measure auditors' sustainability focus by examining the sustainability focus in auditors’ tweets. We find that auditor sustainability focus is positively associated with client sustainability reporting, through both sustainability disclosures and social and governance sustainability activities. Our study provides a greater understanding of auditor involvement in sustainability reporting.