Demand for Data Assurances in Electronic Commerce: An Experimental Examination of a Web-Based Data Exchange Using XML

The emergence of electronic commerce exchanges in the organizational supply chain has created a demand for increased accountability and control among transacting parties. The provision of assurance services has the potential to satisfy this demand, as a compensatory service for exchange partners who would otherwise not have the capability to exercise control over a specific exchange they are involved with. In business-to-business electronic commerce (B2B EC) exchanges, there is a demand for assurance services to ensure data integrity in many situations and types of events. Trustworthiness must be communicated to users when an exchange occurs; a possible way to accomplish this is through the use of control templates, which can validate the content of documents involved in the exchange. In consequence, this type of validation must be provided through assurances at the data level and must be based on the firm’s data model and its structural constraints. The present study examines the impact of data level assurances in minimizing the extent of relational risk in an inter-organizational exchange. A simulated EC system using XML was custom-developed for this experiment to examine the extent to which data assurances that are provided in a system influence the level of assessed risk in an inter-organizational exchange. The results of the study indicate that the provision of datalevel assurances have a strong significant effect on the reduction of relational risk. Furthermore, perceived risk within a specific decision context was found to interact with the availability of data-level assurances when subjects evaluated the overall risk of engaging in transactions with the B2B EC system. These results present significant implications for the demand and supply of data-level assurances in information systems used in B2B EC environments. The study makes important contributions to both researchers and professionals that are evaluating the effect of data level assurances on the overall risk associated with EC exchanges. Demand for Data Assurances in Electronic Commerce: An Experimental Examination of a Web-Based Data Exchange Using XML The emergence of electronic commerce exchanges in the organizational supply chain has created a demand for increased accountability and control among transacting parties. The provision of assurance services has the potential to satisfy this demand, as a compensatory service for exchange partners who would otherwise not have the capability to exercise control over a specific exchange they are involved with. A diverse set of stakeholders in contemporary organizations desire increased and more valid information about the potential consequences of their actions before they enter into risky behaviors. The AICPA has shown an early interest in the assurance market. According to the AICPA, assurance services are “independent, professional services that improve the quality of information, or its context for decision makers” (Elliott 1998). Thus, assurance services can be described as activities conducted by trusted professionals to certify and/or validate business transactions in an organization’s supply chain, as in transactions between trading partners and/or between businesses and consumers. Such services could be used to satisfy assurance needs about the authenticity of trading partners, the availability and performance of services as promised, compliance with regulatory and/or operating procedures, as well as the adequacy of internal control mechanisms (security and integrity of transactions). Some of these assurance goals can be satisfied through extant assurance services where organizational policies and procedures for web-based transactions are reviewed and a seal of approval is provided to signify satisfactory performance. The legitimacy that is attributed to an organization through such third-party assurances, as in the AICPA’s WebTrust and SysTrust services, can enhance the level of trust that might be perceived for that organization’s information system and processes. However, these assurance