Do Auditors Respond to Clients’ Climate Change-related External Risks? Evidence from Audit Fees
研究发现，客户面临的气候变化风险越高，审计费用也越高，且近年来这种关联更强；审计师自身所在地区的气候变化意识也会影响其对客户气候风险的重视程度。
In this study, we investigate whether auditors consider their clients’ climate change-related external risks when making audit pricing decisions. Using county-level proxies based on the number of declared natural disasters and the level of societal climate change awareness, we discover that clients with greater exposure to climate change risks pay significantly higher audit fees. After performing several additional tests, we conclude that auditors consider climate change risks and their potential consequences as a systematic business risk that is factored into the audit fees. For instance, we demonstrate that clients’ climate risk exposure has become more strongly associated with audit pricing in recent years, as climate change has gained greater importance in public debate. Moreover, we discover that auditors place a greater emphasis on clients’ climate risks when they themselves are located in regions with higher climate change awareness, indicating that auditors’ climate change perception also matters. Given the growing interest in climate change-related risks in practice and research, as well as the significance expected to be placed on these risks in the future, our findings are timely and should appeal to a wide range of readers, including investors, regulators, and scholars.