Research On The Impact Of Firm ESG Rating On Auditor Aisk Response

With the progress of society,problems in resources,environment and other aspects continue to appear,and ESG is paid more and more attention.ESG is an investment concept and enterprise evaluation standard that focuses on environmental,social and governance performance.It is an important starting point for enterprises to achieve high-quality development.Non-financial information such as environment and governance will affect the comprehensive evaluation of the enterprise.Based on the risk-oriented audit model,the auditor will pay attention to the ESG risk in addition to the financial risk of the enterprise.The ESG rating of an enterprise satisfies the concern demand of auditors and other third parties on non-financial information of an enterprise,reduces the degree of corporate information asymmetry,reduces audit efforts and resource input,and affects the auditor’s risk perception.In addition,based on the theory of asymmetric information and the signal transfer theory,enterprises release as much information as possible to meet the requirements of various interest groups for identifying non-financial risks,and also hope to use such information to convey positive signals to the outside world to gain reputation,reduce corporate risks and obtain positive risk feedback from auditors.As an information dissemination medium and external supervisor,media reports,on the one hand,can supervise and disclose the ESG performance of listed companies;on the other hand,they can also transmit information to auditors and slow down the possible lag of information transmission,playing a certain regulating role.At present,most studies on the economic consequences of ESG focus on the impact on the internal characteristics of enterprises,and few study the impact of ESG information from the perspective of auditors and other third parties.Therefore,based on the audit process and audit results,this paper measures the auditor’s response from the perspective of audit expenses and audit opinions,and combines theoretical analysis with empirical test to discuss the influence of ESG rating on auditor’s risk response,and further discusses the moderating effect of media attention.Based on the data of Chinese A-share listed companies from 2009 to 2020,A multiple regression model is constructed to empirically test the impact of corporate ESG rating on auditor risk response,namely audit fees and audit opinions.It is found that the higher the ESG rating,the lower the audit cost and the lower the probability of obtaining non-standard audit opinions.By replacing variables,changing sample interval and other robust methods,the conclusion is still valid.Further research shows that media attention has a significant moderating effect on the relationship between the two.Mechanism test shows that ESG rating can reduce audit effort and audit risk premium by reducing the degree of information asymmetry and enterprise risk,thus reducing the degree of auditor’s risk perception and affecting auditor’s risk response decision,that is,reducing audit costs and making it easier to issue standard audit opinions.In addition,the effect of ESG rating on auditors’ risk response is more significant in non-state-owned enterprises and non-Big Four audit.This study reflects the positive effects of ESG,enriches relevant studies on the economic consequences of ESG,tests the governance role of media attention,and provides certain empirical evidence for the improvement and implementation of ESG related policies.