Research About The Impact Of Corporate ESG Performance On Audit Fees

With the continuous enhancement of people’s awareness of sustainable development,the requirements for high-quality development are more urgent.As one of the main entities of the market economy,the behavior of enterprises in participating in market economic activities will not only affect themselves,but also affect the surrounding environment and the sustainability of social development.With the rise of ESG investment concepts,the ESG performance of enterprises has received widespread attention from all walks of life.Capital markets and consumers also place higher demands on companies.ESG rating is an important indicator to measure the sustainable development ability of enterprises,and it is of far-reaching significance to promote the smooth implementation of China’s dual carbon goals and promote the highquality development of China’s economy.In this context,studying whether certified public accountants pay attention to the ESG performance of the audited entity and the response of audit institutions to the ESG performance of enterprises not only has strong theoretical significance,but also can promote both auditors to pay more attention to ESG,which has strong practical significance.By sorting out the existing domestic and foreign studies on the economic consequences of enterprise ESG performance and the influencing factors of audit costs,taking the information asymmetry theory,signal transmission theory,reputation mechanism theory,risk-oriented audit theory and audit "deep pocket" as the theoretical basis,and selecting the data of companies listed on the Shanghai and Shenzhen A-share market from 2013 to 2020 as the research sample,this paper studies the impact of enterprise ESG performance on audit costs by using the empirical test method,The research finds that:(1)There is a significant negative correlation between the performance of enterprise ESG and the audit fee.The better the performance of enterprise ESG,the lower the audit risk transferred,and the lower the audit fee charged by the audit agency.(2)Enterprise ESG performance plays a role in audit costs through the path of"improving ESG performance-improving the quality of information disclosure/reducing the level of financing constraints-reducing audit costs".The better ESG performance of enterprises can reduce the risk premium required by auditors by improving the quality of enterprise information disclosure,easing the level of financing constraints,reducing enterprise risks.(3)The higher the marketization process in the region where the enterprise is located,the higher the requirement for enterprise transparency,the higher the credibility of the ESG performance scoring results,and the more significant the negative correlation between enterprise ESG performance and audit costs.(4)Through the heterogeneity grouping test,it is found that the certified public accountants mainly focus on the ESG rating performance of enterprises with relatively low internal control quality,non-key pollution monitoring units and enterprises with low shareholding ratio of institutional investors,while the heavy pollution industry and enterprises with good internal control quality have no obvious correlation between ESG performance and audit costs due to their own high or low risk.The research selects the comprehensive indicator of enterprise ESG performance,expands the research on the factors affecting audit costs from the perspective of enterprise non-financial performance,provides new empirical evidence for the factors affecting audit costs,and also enriches the research on the economic consequences of ESG performance.This paper explores the impact mechanism of ESG performance on audit costs and examines the regulatory effect of the external factor of regional marketization process.This research perspective is also innovative.