Do Auditors Applaud Corporate Environmental Performance? Evidence from China
This study examines the influence of corporate environmental performance on the propensity that auditors issue modified audit opinions and further investigates the moderating effects of internal control and greenwashing. Using a sample of Chinese listed firms, our findings reveal that corporate envi...
| Authors: | ; ; ; |
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| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
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| Fernleihe: | Fernleihe für die Fachinformationsdienste |
| Published: |
Springer Science + Business Media B. V
2018
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| In: |
Journal of business ethics
Year: 2018, Volume: 151, Issue: 4, Pages: 1049-1080 |
| Further subjects: | B
Audit opinion shopping
B Internal Control B Modified audit opinions B Corporate Environmental Performance B Audit fees B Going concern opinion B Earnings management B Greenwashing |
| Online Access: |
Volltext (lizenzpflichtig) |
| Summary: | This study examines the influence of corporate environmental performance on the propensity that auditors issue modified audit opinions and further investigates the moderating effects of internal control and greenwashing. Using a sample of Chinese listed firms, our findings reveal that corporate environmental performance is significantly negatively associated with modified audit opinions, suggesting that auditors applaud environmentally friendly firms. Moreover, internal control reinforces the negative association between corporate environmental performance and modified audit opinions, but greenwashing attenuates the negative effect of corporate environmental performance on modified audit opinions. The findings are robust to various sensitivity tests, and our conclusions are still valid after controlling for the potential endogeneity. Additional tests reveal that (1) corporate environmental performance is negatively associated with modified audit opinions only for firms without audit opinion shopping and (2) corporate environmental performance is significantly negatively associated with both earnings management and audit fees. |
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| ISSN: | 1573-0697 |
| Contains: | Enthalten in: Journal of business ethics
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| Persistent identifiers: | DOI: 10.1007/s10551-016-3223-6 |