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This paper examines the effects of a different dyadic formation of concurring and lead auditor (‘dyad formation’) to a corporate social responsibility (CSR) assurance engagement – compared to the financial audit dyad – on CSR assurance fees and the probability of disclosing CSR restate-ments due to error, i.e., error restatements in a CSR report. We find that audit firms charge, on average, less CSR assurance fees for CSR assurance engagements with differences in the auditor dyad formation compared to the financial audit. Further, we find that different auditor dyads are likely to increase a client’s disclosure of error restatements. In contrast, higher CSR assurance fees – as being charged by audit firms scheduling the same financial auditors to the CSR assurance engagement – are likely to decrease the probability of error restatements. Our findings reveal a potential gap between financial auditors and auditors primarily conducting CSR assurance engage-ments related to CSR reporting knowledge.

A vast body of literature has focused on environmental, social, and governance (ESG) reporting as a legitimation tool for years. However, considering the introduction of the Corporate Sustainability Reporting Directive (CSRD), it remains an open question whether mandatory reporting requirements will prevent the use of legitimation strategies in the future. Thus, the purpose of this paper is to review the existing literature on gaining, maintaining, and repairing organizational legitimacy through ESG reporting according to Suchman (1995) to get an understanding of the status quo of legitimation strategies used and to provide an outlook on the potential use of legitimation strategies under CSRD. Using a systematic literature review, 228 papers from 1996 to 2022 are analyzed. The findings show that ESG reporting is widely used to manage organizational legitimacy, using a combination of strategies depending on the legitimation challenge companies face. Based on early studies looking at the use of legitimation strategies after the implementation of mandatory ESG reporting requirements, e.g., in South Africa or Australia, this study provides evidence that many strategies in the voluntary reporting context can be transferred to the mandatory reporting context. The findings of this study offer future research opportunities and provide valuable insights for both scholars and stakeholders on how legitimation strategies are used in ESG reporting.