Does corporate social responsibility affect auditor-client contracting? Evidence from auditor selection and audit fees
Xiaolu Xu and
Advances in accounting, 2020, vol. 51, issue C
We find that firms with higher CSR performance are more likely to choose Big N auditors and less likely to switch to non-Big N auditors, consistent with socially responsible firms demanding higher audit quality. Furthermore, we provide robust evidence that firms with higher CSR performance pay lower audit fees using both levels and changes models, suggesting that higher CSR performance reduces auditor engagement risk. Our analysis based on the difference-in-differences approach indicates that it is higher CSR performance that leads to lower audit fees, not vice versa. Overall, the results highlight the important role of CSR performance in auditor-client contracting.
Keywords: Big N auditors; Audit fees; Corporate social responsibility; Auditor-client contracting (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:51:y:2020:i:c:s0882611020300699
Access Statistics for this article
Advances in accounting is currently edited by Dennis Caplan
More articles in Advances in accounting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().