Abstract
This paper mainly studies the impact of the implementation of the new Environmental Protection Law on the change of audit fees of heavy polluting enterprises and non-heavy polluting enterprises. Based on the listed companies in China as samples from year 2012 to 2016 (excluding year 2014), I use new Environmental Protection Law this “natural experiment”, which came into effect on January 1, 2015, and divide the whole samples into the experimental group and control group, according to the list of heavy pollution industry from the Environmental Information Disclosure Guidelines for Listed Companies (draft) issued by ministry of environmental protection in 2010. This passage tries to test whether the new Environmental Protection Law has impacted on audit fees. Furthermore, this paper finds that after the implementation of the new Environmental Protection Law, the audit fees of heavy polluting enterprises increase significantly, and this phenomenon is more significant in regions with good legal environment and strong environmental regulations. The contribution of this paper is to expand the academic research on the influence factor of audit fee, connect the influence of macroscopic law on the behavior of certified public accountants. At the same time, this paper expands the research scope of the intervention of laws and regulations, adding certified public accountants and finds the disciplinary function of audit fees.
Highlights
On November 8, 2012, “Beautiful China” appeared for the first time in the report of the 18th National Congress of the Communist Party of China
This paper mainly studies the impact of the implementation of the new Environmental Protection Law on the change of audit fees of heavy polluting enterprises and non-heavy polluting enterprises
Based on the listed companies in China as samples from year 2012 to 2016, I use new Environmental Protection Law this “natural experiment”, which came into effect on January 1, 2015, and divide the whole samples into the experimental group and control group, according to the list of heavy pollution industry from the Environmental Information Disclosure Guidelines for Listed Companies issued by ministry of environmental protection in 2010
Summary
On November 8, 2012, “Beautiful China” appeared for the first time in the report of the 18th National Congress of the Communist Party of China Taking the data of A-share listed companies in Shanghai and Shenzhen from 2012 to 2016 (excluding 2014) as a sample, using multiple regression analysis to verify the difference in the impact of audit fees between heavy polluting and non-heavy polluting companies after the implementation of the new Environmental Protection Law, and further analyze the impact of different legal environments and environmental regulatory regions. The innovation of this article is to use the new Environmental Protection Law as the “quasi-natural experiment” and the double difference method (DID) to study the impact of government laws and regulations on the increase of audit fees for heavy polluting enterprises, and enrich relevant literature about the impact of macro policies on audit fees and provide new perspectives for future research. It is helpful to evaluate the implementation effect and economic consequences of the new Environmental Protection Law from the perspective of the micro-level reflection of enterprises and accounting firms, which has certain reference significance for relevant regulatory departments and policy-making departments
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