Corporate ESG Performance and Audit Fees: Evidence from Chinese A-Share Listed Companies

Main Article Content

Yaofei Zhu
Department of Accounting, Sun Wah International Business School, Liaoning University, Shenyang 110136, China

DOI: https://doi.org/10.70267/icbms.2601.118131

Keywords

ESG performance, audit fees, operating risk, mechanism test

Abstract

Corporate ESG performance has emerged as a core indicator for evaluating a firm's sustainability and risk profile. Given the growing emphasis on risk-based approaches to audit pricing, how auditors assess the risks associated with corporate ESG performance remains a critical issue that warrants in-depth exploration. This study reveals that superior corporate ESG performance is significantly associated with lower audit fees. Mechanism tests show that strong ESG performance effectively mitigates corporate operating risk. This mitigation significantly reduces the audit risks perceived by auditors, which in turn optimizes audit procedures and ultimately lowers audit fees. Heterogeneity analysis reveals that this negative relationship is more pronounced in firms audited by non-Big Four accounting firms and those that do not hold shares in financial institutions. This study provides novel empirical evidence for audit pricing mechanisms from an ESG perspective and enriches the existing literature on the economic consequences of corporate ESG performance.

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Published
Mar 17, 2026
Conference Proceedings Volume
Vol. 13 (2026): Proceedings of the 3rd International Conference on Business, Management and Sustainability (ICBMS 2026)
Section
Articles
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This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Zhu, Yaofei. “Corporate ESG Performance and Audit Fees: Evidence from Chinese A-Share Listed Companies”. Exploring Science Academic Conference Series, vol. 13, Mar. 2026, pp. 118-31, https://doi.org/10.70267/icbms.2601.118131.