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Who really cares? Climate change exposure and auditor conservatism: Evidence from China

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  • Yang, Chao
  • Song, Di

Abstract

This study examines the association between climate change exposure and auditor conservatism, indicating that firms with high climate change exposure demonstrate a higher level of auditor conservatism. The mechanism analysis reveals that climate change exposure reinforces auditor conservatism partly through the combined effects of earnings management and investor sentiment. Multiple robustness checks confirm the validity of main results. Given the growing interest in climate change and its associated risks in both practice and research, as well as the expected increasing significance of these risks, our findings are timely to a broad audience, including investors, regulators, auditors, managers, and scholars.

Suggested Citation

  • Yang, Chao & Song, Di, 2024. "Who really cares? Climate change exposure and auditor conservatism: Evidence from China," Finance Research Letters, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324013618
    DOI: 10.1016/j.frl.2024.106332
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    References listed on IDEAS

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