Abstract
ABSTRACT In this paper, we first conduct a longitudinal study of public companies’ climate change risk disclosures from 2005 to 2019. Results indicate that although the number of firms disclosing climate change risks increased over time, disclosure length and disclosure clarity did not improve consistently during the study period. It seems that firms temporarily adjusted their disclosure behaviors around 2010 to satisfy the SEC’s 2010 guidance regarding climate change disclosures. From that point forward, however, companies’ disclosure length and clarity declined. Climate change and disclosures in a client’s environment can elevate both inherent risk and audit risk. Accordingly, the second part of the study empirically examines whether climate change risk disclosures are embedded into the auditors’ risk model and associated audit prices. Results suggest that audit fees are significantly associated with climate change risk disclosure length and clarity, and lower climate change risk disclosure clarity is associated with higher audit fees.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
