Do Consumers Understand What WebTrust Means?

By Kris Portz, Joel M. Strong, Bruce Busta, and Ken Schneider

In Brief

Is What You See What You Get? WebTrust was developed in 1997 by the AICPA as a means for e-commerce businesses to indicate that their practices and policies, as stated in their advertising, have been attested to by a CPA. In the course of a WebTrust engagement, a CPA examines three areas of a company's website: business practice disclosures, transaction integrity, and information protection. Websites meeting the established criteria in these areas earn the right to display the WebTrust seal.

To test consumer perceptions about the seal and explore the possible implications of those perceptions, the authors used a model website that displayed the WebTrust seal but without any information about its meaning. The results were mixed in terms of potential customers correctly understanding what WebTrust signifies.

Because WebTrust is still new and being revised and enhances, its future is uncertain. But many concerns -and questions for additional research-remain.

  The CPA WebTrust Seal of assurance is a graphical representation intended to indicate a Web site's compliance with the CPA WebTrust Principles and Criteria and its reproduced herein for illustrative purposes only.

By various estimates, buyers and sellers exchanged $8 billion on the Internet in 1997 and will exchange well over $300 billion per year by 2002. These technological advances, coupled with the declining usefulness of historical financial statements, have heightened the auditing profession’s fears that financial accounting services and audits are no longer a growth product.

To expand their profit potential and keep up with the times, CPA firms are exploring new ways to extend their range of services. CPAs can capitalize on their experience with attestation and take advantage of the exploding e-commerce arena by offering WebTrust—a verification service for websites—through a licensing program offered by the AICPA. The licensing requirements are simple: After attending an AICPA-sponsored seminar and paying the required fees, CPAs can offer WebTrust assurance services. However, CPAs must carefully consider whether they have the necessary technical skills to properly perform such services.

Why Use WebTrust?

A small business in a niche market—such as a travel agent specializing in ecotours to the South Pacific, or a microbrewery whose unique products are tied to local crops and climate—may want to expand by advertising and selling its products over the Internet. Establishing an e-commerce website for such a business is not complicated, but convincing a potential customer that the business is trustworthy can be difficult because Internet consumers will probably not recognize the company’s name.

A consumer researching South Pacific vacations on the Internet might find a small, unfamiliar travel agent that specializes in such trips. The customer will have a host of questions: Is this a real company? If I purchase a vacation, will the agent deliver the advertised product? What is the refund policy? Whom do I contact if a problem arises? If I reveal the dates that I will be on vacation (therefore the dates my home will be vacant), how do I know this information will be kept private?

WebTrust was created to answer many of these questions. Specifically, it is designed to build trust by providing assurance from an independent, objective CPA that 1) the website discloses its operating practices and follows them as stated, 2) the business has controls in place for processing electronic transactions properly, and 3) information received electronically is used for business purposes only.

How WebTrust Works

A CPA firm examines three areas of the company and its website: business practice disclosures, transaction integrity, and information protection. Websites that meet the established criteria for these three areas earn the right to display the WebTrust seal.

  • Business practice disclosures. Consumers must be informed about an entity’s business practices in order to feel confident about conducting business with it. WebTrust’s first principle requires that an entity disclose its business practices for e-commerce transactions on its website and execute those practices as stated in the disclosures. Business practices that must be disclosed include the length of time it takes to fulfill an order, the normal method of delivery, the company’s refund and information protection policies, and whom to contact with any questions. For instance, if the company’s policy is to ship the order two days after it is received, the CPA would confirm that this policy is disclosed on the website and verify through testing that the company conforms to this practice.
  • Transaction integrity. The business must maintain effective controls in order to ensure that customer orders placed electronically are correctly completed and billed. Controls include checking each order for accuracy and completeness, sending customers an acknowledgement that their order has been received, and verifying that the order is shipped in the correct quantities and within the agreed-upon time frame. The CPA verifies that the company has proper controls in place to maintain the integrity of electronic transactions and that those controls function properly.
  • Information protection. WebTrust-approved companies must maintain effective controls to ensure that private customer information is protected from unrelated uses. These controls include measures that protect their e-commerce systems from outside access, protect private customer information from being used for nonbusiness purposes, and ensure secure transmission of information over the Internet. CPAs must verify that these controls are in place and functioning properly.

    Although WebTrust is not intended to provide assurances about the quality of the company’s products or services or to “approve” its business practices, some Internet consumers may desire such third-party assurances and incorrectly assume that WebTrust provides them.

    At this time only a handful of companies display the WebTrust seal. Although more CPA firms are becoming licensed to provide it, demand remains uncertain. The ultimate success of WebTrust will depend upon consumers’ perceptions. Their willingness to change their buying behaviors because of WebTrust depends on their understanding of and confidence in the program.

    The Experiment

    To test consumers’ perceptions and understanding of WebTrust, subjects examined a website for the purpose of ordering a product online. The company displayed the WebTrust seal on every web page but provided no additional information about the meaning of WebTrust. Therefore, subjects had to make assumptions about WebTrust based solely on the presence and appearance of the seal.

    Results of the study vary: Most subjects formed an accurate impression of information protections, but not about business practices or transaction integrity. The majority of subjects correctly understood that WebTrust does not verify the quality of the product; however, many subjects incorrectly presumed that WebTrust approves business practices and overestimated the degree of protection against fraud implied by the seal.

    Perceptions about WebTrust have implications for practitioners, Internet vendors, and consumers. Because WebTrust is new and its success depends on user reactions, the results of this study provide useful insights.

    As part of the experiment, subjects viewed a Trail Boss Cookin’ website, then answered a series of questions related to the website and WebTrust. The website, which advertises a cookbook, was originally developed by the AICPA to demonstrate the WebTrust seal. For the experiment, the website was updated to adhere to the current WebTrust 2.0 standards. (The site can be viewed at˜jstrong/ cpa1.)

    Study participants included 49 second-year undergraduate business majors from a midwestern university, 21 men and 28 women (See the Exhibit. The results do not include the five students that had been exposed to WebTrust prior to the experiment). Participation was voluntary, and the subjects were intended to represent Internet users that are largely unfamiliar with WebTrust.

    Written instructions and a scenario were given to each subject and read aloud at the beginning of the experiment. The scenario explained that the subject had browsed the Internet and found the perfect present for a friend’s upcoming birthday. The scenario was designed to motivate the subject to purchase the cookbook even if the subject had no interest in cooking. Subjects were told they would examine a website and then be questioned on its contents. They were told to visit and examine every page, click on every link, and read through all of the information carefully.

    Subjects were instructed to spend approximately 10 minutes reviewing the web pages but were not timed. After the subjects finished, they exited the website and completed the questionnaire, which was divided into two parts:

  • Demographic questions, general WebTrust questions, and specific questions about the website; and
  • Twenty randomized multiple-choice questions, five on each of the three WebTrust concepts and five on different aspects of WebTrust (e.g., fraud, marketing).

    Although the website displayed the WebTrust seal, there was no additional information about WebTrust and the seal had no “Click Here” text or link to further information as recommended by the AICPA. This inability to “drill down” on the seal is an important control in the experiment. WebTrust is designed to inform the consumer about the assurances it provides by having the consumer click or drill down on the seal. If consumers fail to do so, they will form perceptions and assumptions about the assurances provided based solely on the appearance of the seal.

    This control was created because prior research showed that when simulated consumers are presented with a web page and told that they should follow every link on the page, including the WebTrust link, only 21% actually follow that link. The implications of this finding are significant: When consumers encounter a website with the WebTrust seal, they are unlikely to click on the seal to learn more about it and will form perceptions about it simply by observing the seal.

    These implications become even more important with the new modularized approach to WebTrust that will allow businesses to choose from a menu of WebTrust principles and request a report on only those selected principles most relevant to their needs. Under this approach, the potential customer must click on the WebTrust seal to reveal which principles were independently verified by the CPA. The WebTrust seal could represent different assurances for each site on which it appears based on the principles selected by each company.

    General Results

    Subjects correctly answered an average of 44% of the five questions about the company’s business practices and averaged 28% correct for questions on transaction integrity. These low percentages indicate that the concepts of business practices and transaction integrity are poorly understood and consumer perceptions about these WebTrust principles are inaccurate. For the questions relating to information protection, the average score was 62%, indicating that, overall, the subjects more accurately perceived the information protection principle. This result is not surprising: In a recent survey of 10,000 people by Forrester Research, two-thirds of respondents said they did not buy online because of privacy concerns. Privacy and information protection are important issues that Internet users generally understand and are not unique to WebTrust.

    The overall implication of these findings is that if consumers are not aware they can drill down on the logo or do not take the time to do so, misperceptions or misunderstandings about WebTrust and the assurances it provides are likely. These misperceptions or misunderstandings could become more of an issue with the modular approach to WebTrust, when the only way to determine which principles have been attested to will be through the drill-down feature.

    Other Findings

    Two questions asked indirectly whether subjects felt that the WebTrust seal warranted the quality of the product. Fewer than 13% of the subjects believed that WebTrust verified the quality of the cookbook, a reassuring finding that reflects accurate assumptions about the nature of WebTrust.

    The type of product sold on the website may have affected this result. For instance, although the average consumer is unlikely to expect that a

    CPA-awarded seal attests to the quality of a cookbook, that same consumer might believe the WebTrust seal attests to the quality of a financial planning tool or investment newsletter. Several consumer-oriented websites that currently display the WebTrust seal offer financial products and services, including E*Trade ( and H.D. Vest Financial Services ( Clearly, this area requires future research.

    Questions and Concerns

    One criticism of WebTrust is that although the program is not intended to actually endorse products, it is marketed as a type of “Good Housekeeping Seal.” Critics have suggested that consumers are unable to distinguish between a verification of the product itself and a verification of the business processes used to sell the product. The limited results of this study indicate that consumers do make this distinction.

    Subjects were asked how much protection against fraudulent business practices the WebTrust seal provides or implies. Fifty-nine percent correctly indicated that “WebTrust helps to minimize the possibility of fraud,” while 22% incorrectly indicated that “customers are absolutely protected against fraud.” This result is cause for concern. If 22% of consumers believe that WebTrust absolutely protects against fraud, CPAs could be exposed to legal action. The disparity between a consumer’s perception of the assurances and what the assurances actually are creates an expectation gap. Accountants have a long, painful history of dealing with the expectation gap, and the presence of one regarding the WebTrust program must be carefully examined and every effort made to mitigate it.

    Moreover, another question revealed that 59% of study participants thought that the CPA “approved the business practices,” whereas 25% thought that the CPA “compared actual policies against stated policies.” This is an area for concern. Clearly an expectation gap exists regarding the level of assurance actually provided. This gap could widen if a company set an unusual business practice that might be detrimental to the consumer. For example, if the company had a no returns policy, the CPA might be held liable if a consumer believed the WebTrust seal indicated that the company follows “sound business practices,” rather than simply verified that the stated policies were being followed.

    Limitations. Because of this study’s limitations, the results should be viewed as preliminary and used to spur further research rather than to draw firm conclusions about the WebTrust program. The motivation of the simulated consumer may not have been realistic. Unlike real consumers, the subjects faced no real financial risk. Additionally, the sample size was small.

    Notes for Future Research

    The results of the study are mixed in terms of the message users receive from the WebTrust seal. In some areas, the seal provides a fairly accurate impression of the purpose of the service. On average, about 62% of the subjects formed an accurate impression of the information protection principle. Also, most subjects correctly understood that WebTrust does not verify the quality of the client’s product or service.

    On the downside, however, less than half of the subjects concluded that WebTrust verifies that the client is following its stated business practices and less than a third understood that WebTrust ensures the integrity of the transaction. Also, three out of five subjects incorrectly concluded that WebTrust approves of the client’s business practices. Finally, the results of the study suggest that some consumers overestimate the degree of protection against fraud implied by WebTrust.

    Future research should focus on ways to better inform consumers, through the seal or other means, that WebTrust—

  • attests only that the business follows its advertised practices, not that they are sound practices,
  • does not provide protection against outright fraud, and
  • attests to transaction integrity.

    Future research should also address situations in which consumers will desire enhanced assurance services. For example, in this study the product being purchased (a cookbook) was not a high-value item. Purchasing expensive or intangible products or services (e.g., travel, financial services) may warrant more consumer skepticism and therefore, increase the need for assurance. Further research may reveal that consumers would more readily purchase such products or services online if greater assurance is provided.

    If these issues are investigated and addressed in a timely and effective manner, WebTrust could thrive as an exciting and profitable product for CPAs and a valued service in the e-commerce arena.

    Kris Portz, PhD, CPA, and Joel M. Strong, PhD, CPA, are assistant professors of accounting, and
    Bruce Busta, PhD, CPA, a professor of accounting, all at the G.R. Herberger College of Business at St. Cloud State University, Minnesota.
    Ken Schneider, PhD, is a professor of marketing and marketing research, also at St. Cloud State University.

    Editor’s Note: The authors welcome comments, questions, and requests to share experimental materials and data. Contact

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