The Impact of ESG Performance on Audit Fees: Evidence from Chinese Listed Companies

DOI

10.2991/978-94-6463-874-5_35How to use a DOI?

Keywords

ESG Performance; Audit Fee; ESG Rating

Abstract

Amid growing global emphasis on ecological sustainability, ESG metrics have emerged as crucial indicators of corporate sustainability performance. This study examines the audit fee implications of environmental, social and governance factors by analyzing longitudinal data from A-share companies listed on China’s Shanghai and Shenzhen stock exchanges (2016-2022). Utilizing a double fixed effects regression approach, the empirical results demonstrate that superior ESG performance is associated with lower audit fees. The analysis indicates that enhanced ESG disclosure and implementation significantly reduce external audit pricing. These findings suggest that robust ESG performance may decrease perceived audit risks, thereby leading to cost savings in the auditing process. The study employs rigorous econometric methods to establish this inverse relationship between ESG factors and audit service charges. Specifically, enterprises with superior ESG performance demonstrate lower audit costs, which can be attributed to three key mechanisms: increased information disclosure quality. Based on the empirical findings, this study proposes two policy recommendations aimed at supporting corporate ESG advancement and enhancing audit quality. These suggestions are designed to help firms overcome existing challenges in sustainable development practices while strengthening financial oversight mechanisms: enterprises should further develop and improve ESG-related systems and ESG information disclosure mechanisms. Auditors should improve their use of ESG information in their audits.

Copyright

© 2025 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Download article (PDF)

TY  - CONF
AU  - Yuanyi Feng
PY  - 2025
DA  - 2025/11/03
TI  - The Impact of ESG Performance on Audit Fees: Evidence from Chinese Listed Companies
BT  - Proceedings of the 2025 International Conference on Financial Innovation and Marketing Management (FIMM 2025)
PB  - Atlantis Press
SP  - 277
EP  - 285
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-874-5_35
DO  - 10.2991/978-94-6463-874-5_35
ID  - Feng2025
ER  -