Environmental Responsibility, Social Responsibility, and Governance from the Perspective of Auditors

Jaehong Lee, Suyon Kim () and Eunsoo Kim
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Jaehong Lee: Major in Accounting/Taxation, Division of Business Administration, Kyonggi University, Suwon 16227, Korea
Suyon Kim: YSB Center for Global ESG and Business Ethics, Yonsei-ro 50, Seoul 03722, Korea
Eunsoo Kim: Department of Global Business Administration, Sangmyung University, Seoul 03016, Korea

IJERPH, 2022, vol. 19, issue 19, 1-14

Abstract: This study examined the relationship between ESGs and the audit hours of 3010 Korean stock-listed firms from 2014 to 2019. The Korean Corporate Governance Service assigns ratings to each firm based on ESG performance. We discover that auditors exert more effort auditing companies that prioritize ESGs. Additionally, we evaluated whether the CEO’s competency level influences the relationship between ESGs and the total amount of time spent auditing the company. We observed that auditors spend less time auditing companies with highly competent CEOs. We disaggregated the total number of audit hours by rank and verified each audit hour completed by partners, CPAs, as well as staff. Based on our research, we conclude that a firm’s ESG increases audit complexity, and increases the amount of effort exerted in the auditing process.

Keywords: ESG performance; audit hours; audit effort; managers’ ability; audit hours by rank (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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