Can the Environmental Credit Evaluation System Affect Audit Fees?
Taking the implementation of environmental credit evaluation system as a quasi-natural experiment,this paper uses Chinese A-share listed companies from 2006 to 2021 as samples,and constructs a difference-in-difference-in-differences model to explore the impact of environmental credit evaluation system on audit fees.The results show that the implementation of environmental credit evaluation system can significantly reduce audit fees,and the higher the environmental credit rating,the lower the audit fees.The impact mechanism analysis indicates that the environmental credit evaluation system can reduce audit fees through the information risk and operating risk mech-anisms.That is,the environmental credit evaluation system will suppress the information risk and operating risk of companies by improving the transparency of environmental information and easing the volatility of earnings,thereby reducing audit fees.Further analysis finds that the negative rela-tionship between the environmental credit evaluation and audit fees are more obvious in non-state-owned enterprises,those located in poor legal environment and low level of trust.This study not only enriches the relevant research on the economic consequences of environmental credit evaluation system,but also expands the literature on the factors affecting audit fees.It has revelatory signifi-cance for government departments to further promote the environmental credit evaluation system,reasonably guide enterprises to continuously improve environmental behavior,and help auditors of-fer high-quality audit services.
Environmental Credit EvaluationAudit FeesTransparency of Environmental Informa-tionVolatility of Earnings