Sustainability Makes Auditors See Green

摘要

Judgements concerning corporate governance are key in an audit report. Being socially responsible -"going green " - can suggest good governance, so a company may seek a corporate social responsibility (CSR) report toward this end. Will this result in lower audit fees? A study of 2010 audit fees for 120 such companies (based on Global Reporting Initiative guidelines) versus over 3,000 non-GRI firms in two industries suggests it will not. Although a CSR report may lead an auditor to reduce its assessment of the risk of misstated earnings, other activities can offset this, namely: incurring higher expenses if the auditor must help gather and then verify CSR data; selecting a high-priced audit firm to make an impression on stakeholders or regulators; and triggering an auditor's opinion that the firm "over-invested" in CSR. These potential negatives may be offset if the company obtains independent third-party verification of the CSR report before the audit.