EconPapers    
Economics at your fingertips  
 

Voluntary corporate social responsibility reporting and financial statement auditing in China

Peter Carey, Li Liu and Wen Qu

Journal of Contemporary Accounting and Economics, 2017, vol. 13, issue 3, 244-262

Abstract: This study finds a positive association between voluntary corporate social responsibility (CSR) reporting and audit fees in China. In contrast to prior research from the US, CSR reporting in China is associated with greater earnings management. Results suggest that Chinese firms use CSR reporting as a strategic device for window dressing, and that auditors charge higher fees in response to heightened audit risk and greater audit effort. Further, the positive effects of CSR reporting on audit fees and earnings management are more significant for non-state-owned enterprises (non-SOEs) than for state-owned enterprises, which suggests that non-SOEs have not fully embraced the principles of CSR and essentially use CSR reporting to create the appearance of legitimacy. In additional tests, we find that non-SOEs with more highly rated CSR performance or longer CSR reports are associated with lower audit fees and less earnings management.

Keywords: Corporate social responsibility; Audit fees; Earnings quality; CSR disclosure; Audit risk; Window dressing (search for similar items in EconPapers)
JEL-codes: D21 D8 M42 O1 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1815566917300310
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:13:y:2017:i:3:p:244-262

Access Statistics for this article

Journal of Contemporary Accounting and Economics is currently edited by Agnes C.S. Cheng, P. Clarkson, F.A. Gul, Zoltan Matolcsy, Dan Simunic and Ben Srinidhi

More articles in Journal of Contemporary Accounting and Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-01-26
Handle: RePEc:eee:jocaae:v:13:y:2017:i:3:p:244-262