Climate risk and audit fees : An international study

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Number of pages37
Journal / PublicationAccounting and Finance
Online published2 Jun 2023
Publication statusOnline published - 2 Jun 2023


Using a comprehensive global sample, we find that climate risk positively relates to audit fees. Specifically, auditors charge higher fee premiums when firms are located in countries with more stringent auditing regulations, higher information opacity and less adaptive capacity for climate risk. Audit fee premiums are also higher when firms are incentivised to manipulate earnings, less important to auditors, and audited by short-tenured and industry-specialised auditors. Our study provides worldwide evidence that climate risk induces more earnings management and increases the efforts of auditors in the auditing process, resulting in higher audit fees. © 2023 Accounting and Finance Association of Australia and New Zealand.

Research Area(s)

  • audit fees, climate risk, international evidence