 Does ESG performance affect audit pricing? Evidence from ChinaYunling Song, Hao Wu and Yan Ma International Review of Financial Analysis, 2023, vol. 90, issue C Abstract: In this paper, we find that better environmental, social, and governmental (ESG) performance is associated with lower audit pricing in terms of both raw and abnormal audit fees in China. But the environmental, social, and governmental pillars don't play the same role in driving that relationship. Our main findings are robust to a battery of sensitivity tests, including alternative measures of ESG performance and additional control variables, as well as different approaches to address potential endogeneity. Additional analyses indicate that reduced risk and increased information transparency might be channels by which ESG performance affects audit pricing while auditor industry expertise and independence moderate this impact. Overall, this paper reveals the importance of considering the dimensional ESG factors simultaneously instead of on a stand-alone basis to better understand ESG and promote balanced ESG development. Keywords: ESG performance; ESG pillars; Audit pricing; Abnormal audit fees; Audit risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:90:y:2023:i:c:s1057521923004064 DOI: 10.1016/j.irfa.2023.102890 Access Statistics for this article International Review of Financial Analysis is currently edited by B.M. Lucey More articles in International Review of Financial Analysis from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.