Research On The Impact Of Corporate ESG Performance On Audit Fees

Traditional financial reports can no longer meet the needs of external information users for the investigation of corporate sustainable development and green development capabilities,and the ESG concept covering corporate environmental,social and corporate governance performance has promoted the transformation of corporate goals from pursuing the maximization of their own interests to taking into account the value of environmental,social and corporate governance,providing a new perspective for the evaluation of comprehensive capabilities of enterprises,and has received extensive attention from theoretical and practical circles.The existing research mainly focuses on the impact of corporate ESG performance on internal factors such as corporate performance and corporate value,and few literature has extended the study of the economic consequences of corporate ESG performance to the field of auditing,and few studies have explored the impact of corporate ESG performance on auditor’s decision-making behavior.Therefore,studying the impact of ESG performance on audit fees has certain theoretical value and practical significance.In order to explore the relationship between corporate ESG performance and audit fees,the mechanism and channel of corporate ESG on audit costs,and the heterogeneous characteristics of the relationship between corporate ESG performance and audit costs,this thesis adopts literature analysis,normative research and empirical research,and selects A-share listed companies from 2011 to 2020 as research samples for comprehensive analysis.Firstly,the relationship between corporate ESG performance and audit cost is empirically tested by multiple regression model,and then the role mechanism of analyst coverage in the relationship between corporate ESG performance and audit cost is studied by taking analyst coverage as the regulating variable.Secondly,group regression is used to test whether the impact of ESG performance on audit fees is heterogeneous between property rights and industry attributes.In addition,robustness tests are carried out by metric method substitution,hysteresis effect test,and instrumental variable method.Finally,the mediating effect of agency cost in the relationship between corporate ESG performance and audit cost is further studied,the driving factors of corporate ESG performance on audit fee reduction,and the difference between the impact of three dimensions of enterprise ESG performance on audit cost.The results show that:(1)There is a significant negative correlation between corporate ESG performance and audit fees,and the good ESG performance of enterprises reduces the audit fees.(2)analyst coverage playing a moderating role in the relationship between corporate ESG performance and audit costs,which amplifies the effect of corporate ESG performance on audit costs.(3)The relationship between ESG performance and audit fees of enterprises has significant heterogeneity in the nature of property rights and industry attributes,and the ESG performance of non-state-owned enterprises and polluting enterprises has a more significant effect on the reduction of audit fees than that of state-owned enterprises and non-polluting enterprises.(4)Agency cost plays an intermediary role in the relationship between enterprise ESG performance and audit fees,and enterprise ESG performance can affect audit fees by reducing agency costs;The effect of corporate ESG performance on the reduction of audit fees includes the reduction of both audit effort and audit risk;Due to the direct reduction effect of corporate governance performance on audit fees and the lag of environmental and social performance on audit fees,among the three dimensions of corporate ESG performance,corporate governance performance has the most significant impact on audit fees.According to the research conclusions,targeted suggestions are put forward from the perspectives of listed companies,auditors and government departments,in order to provide reference for the improvement of audit work quality and the formulation of audit fee standards.