IDEAS home Printed from https://ideas.repec.org/a/spr/snbeco/v5y2025i10d10.1007_s43546-025-00919-3.html
   My bibliography  Save this article

Exploring the nexus between environmental initiatives and audit fees: the moderating role of supplier ESG and environmental management training

Author

Listed:
  • Meltem Altin

    (Bursa Uludag University)

  • Mawih Kareem Al Ani

    (Dhofar University)

  • Habiba Al-Shaer

    (University of Stirling)

  • Mustafa Ozgun Atalay

    (Karadeniz Technical University)

Abstract

As companies increasingly adopt sustainable practices to enhance corporate reputation and regulatory compliance, the associated costs, including green product innovation and environmental auditing, often lead to higher audit fees. This study investigates the impact of environmental initiatives on audit fees, with a focus on the moderating effects of Supplier ESG Training (SESGT) and Environmental Management Training (EMT) in selected Western European countries. Analyzing a sample of 281 firms across Austria, Germany, France, the Netherlands, Switzerland, Belgium, Luxembourg, and Monaco from 2014 to 2023, the findings reveal that environmental initiatives increase audit fees, but SESGT and EMT programs mitigate this effect by reducing audit risks and efforts. Additionally, firms with an environmental management team experience a stronger relationship between environmental initiatives and audit fees, while this effect is weaker in firms without such a team. To analyze the data, a dynamic panel data model is employed, applying the Generalized Method of Moments (GMM) estimator to control for endogeneity and omitted variable bias. This study provides critical insights for firms, auditors, and regulators by demonstrating how supplier ESG and environmental training can mitigate the audit cost burden of environmental initiatives, reducing audit risks while enhancing corporate accountability.

Suggested Citation

  • Meltem Altin & Mawih Kareem Al Ani & Habiba Al-Shaer & Mustafa Ozgun Atalay, 2025. "Exploring the nexus between environmental initiatives and audit fees: the moderating role of supplier ESG and environmental management training," SN Business & Economics, Springer, vol. 5(10), pages 1-35, October.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:10:d:10.1007_s43546-025-00919-3
    DOI: 10.1007/s43546-025-00919-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s43546-025-00919-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s43546-025-00919-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Mawih Kareem Al Ani & Faris ALshubiri & Habiba Al-Shaer, 2024. "Sustainable products and audit fees: empirical evidence from western European countries," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 15(3), pages 654-675, February.
    2. Noor Ullah Khan & Wenya Wu & Roselina Binti Ahmad Saufi & Nur Ain Ayunni Sabri & Ashfaq Ahmad Shah, 2021. "Antecedents of Sustainable Performance in Manufacturing Organizations: A Structural Equation Modeling Approach," Sustainability, MDPI, vol. 13(2), pages 1-23, January.
    3. Luluk Muhimatul Ifada & Romlah Jaffar, 2023. "Does Environmental Cost Expenditure Matter? Evidence from Selected Countries in the Asia-Pacific Region," Sustainability, MDPI, vol. 15(5), pages 1-16, February.
    4. Dongxiao Wu & Xinzhong Bao & Qiulan Su, 2023. "From Green Ideas to Green Savings: Assessing the Financial Impact of Green Innovations on Audit Fees," Sustainability, MDPI, vol. 15(14), pages 1-15, July.
    5. Faisal Shahzad & Ijaz Ur Rehman & Waqas Hanif & Ghazanfar Ali Asim & Mushahid Hussain Baig, 2019. "The influence of financial reporting quality and audit quality on investment efficiency," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 27(4), pages 600-614, October.
    6. Diane Holt & Ralf Barkemeyer & Frank Figge & Susan R. Hume & Liam Gallagher, 2010. "The value for service industry firms of environmental initiatives," Management Research Review, Emerald Group Publishing Limited, vol. 33(11), pages 1054-1063, September.
    7. repec:eme:ijoes0:ijoes-05-2017-0071 is not listed on IDEAS
    8. Stevanovic, Anna, 2021. "Environmental Context and Team Structure," Junior Management Science (JUMS), Junior Management Science e. V., vol. 6(2), pages 393-407.
    9. Cao, Yifan & Li, Qingying & Shen, Bin & Wang, Yulan, 2023. "Buyer collaboration in managing supplier responsibility with ESG due diligence effort spillover and fairness concerns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    10. Danny Cassimon & Peter-Jan Engelen & Luc Liedekerke, 2016. "When do Firms Invest in Corporate Social Responsibility? A Real Option Framework," Journal of Business Ethics, Springer, vol. 137(1), pages 15-29, August.
    11. Mahmoud Elmarzouky & Khaled Hussainey & Tarek Abdelfattah, 2022. "The key audit matters and the audit cost: does governance matter?," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 31(1), pages 195-217, December.
    12. Susan R. Hume & Liam Gallagher, 2010. "The value for service industry firms of environmental initiatives," Management Research Review, Emerald Group Publishing Limited, vol. 33(11), pages 1054-1063, September.
    13. Ferrari, Silvia L. P. & Cribari-Neto, Francisco, 1998. "On bootstrap and analytical bias corrections," Economics Letters, Elsevier, vol. 58(1), pages 7-15, January.
    14. Susan R. Hume & Liam Gallagher, 2010. "The value for service industry firms of environmental initiatives," Management Research Review, Emerald Group Publishing Limited, vol. 33(11), pages 1054-1063, September.
    15. Amer Rajput & Saqib Gulzar & Khurram Shafi, 2019. "Impact of Supplier Development on Supplier Performance: Mediating Role of Trust," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 11(2), pages 45-66, June.
    16. Cemal Zehir & Burcu Ozgul, 2020. "Environmental orientation and firm performance: The mediation mechanism of green innovation," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(5), pages 13-25, September.
    17. Wei Zhao & ZhengShan Luo & Qilei Liu, 2023. "Does supply chain matter for environmental firm performance: mediating role of financial development in China," Economic Change and Restructuring, Springer, vol. 56(6), pages 3811-3837, December.
    18. Li-Jun Zhang & Ran Liu & Hu-Chen Liu & Hua Shi, 2020. "Green Supplier Evaluation and Selections: A State-of-the-Art Literature Review of Models, Methods, and Applications," Mathematical Problems in Engineering, Hindawi, vol. 2020, pages 1-25, July.
    19. Li, Xuelian & Liu, Ming, 2024. "Abnormal audit fees and financial reporting quality: A meta-analysis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 55(C).
    20. Giuseppe Cavaliere & Sílvia Gonçalves & Morten Ørregaard Nielsen & Edoardo Zanelli, 2024. "Bootstrap Inference in the Presence of Bias," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 119(548), pages 2908-2918, October.
    21. William Coffie & Ibrahim Bedi, 2019. "The effects of IFRS adoption and firm size on audit fees in financial institutions in Ghana," Accounting Research Journal, Emerald Group Publishing Limited, vol. 32(3), pages 436-453, September.
    22. Carey, Peter & Liu, Li & Qu, Wen, 2017. "Voluntary corporate social responsibility reporting and financial statement auditing in China," Journal of Contemporary Accounting and Economics, Elsevier, vol. 13(3), pages 244-262.
    23. Annachiara Longoni & Davide Luzzini & Marco Guerci, 2018. "Deploying Environmental Management Across Functions: The Relationship Between Green Human Resource Management and Green Supply Chain Management," Journal of Business Ethics, Springer, vol. 151(4), pages 1081-1095, September.
    24. Nhat Tan Pham & Tan Vo-Thanh & Muhammad Shahbaz & Toan Luu Duc Huynh & Muhammad Usman, 2020. "Managing environmental challenges: Training as a solution to improve employee green performance," Post-Print hal-02614722, HAL.
    25. Zeeshan Ullah, 2021. "Sustainable product attributes and firm performance: The moderating role of marketing resource intensity," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 4107-4120, December.
    26. Kim, Hyung-Tae & Lee, Seungwon & Park, Sung-Jin & Lee, Brandon, 2019. "Audit fees and corporate innovation: Auditors' response to corporate innovation," MPRA Paper 101081, University Library of Munich, Germany.
    27. Mahmoud Elmarzouky & Khaled Hussainey & Tarek Abdelfattah, 2022. "Do Key Audit Matters Signal Corporate Bankruptcy?," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 21(3), pages 315-334, September.
    28. Bashar Barakat & Marwan Milhem & Gehad Mohammed Ahmed Naji & Mohammed Alzoraiki & Habsah Binti Muda & Ali Ateeq & Zahida Abro, 2023. "Assessing the Impact of Green Training on Sustainable Business Advantage: Exploring the Mediating Role of Green Supply Chain Practices," Sustainability, MDPI, vol. 15(19), pages 1-21, September.
    29. Francesco Grimaldi & Alessandra Caragnano & Marianna Zito & Massimo Mariani, 2020. "Sustainability Engagement and Earnings Management: The Italian Context," Sustainability, MDPI, vol. 12(12), pages 1-16, June.
    30. repec:eme:maj000:maj-12-2019-2515 is not listed on IDEAS
    31. Shuqi Lou & Xiaoyue You & Tao Xu, 2024. "Sustainable Supplier Evaluation: From Current Criteria to Reconstruction Based on ESG Requirements," Sustainability, MDPI, vol. 16(2), pages 1-23, January.
    32. Eugenia Yujin Lee & Wonsuk Ha, 2021. "Auditors’ response to corporate fraud: evidence from audit fees and auditor turnover," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 36(3), pages 405-436, July.
    33. Preksha Yadav & Jain Mathew, 2023. "Improving Organizational Sustainable Performance of Organizations Through Green Training," International Journal of Social Ecology and Sustainable Development (IJSESD), IGI Global Scientific Publishing, vol. 14(1), pages 1-11, January.
    34. Yun Hsuan Su, 2023. "The effect of product innovation, CSR, environmental sustainability and technology innovation on firm performance: a mediated moderation model," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2180417-218, July.
    35. Kelei Xue & Guohua Sun & Yuyan Wang & Shuiye Niu, 2021. "Optimal Pricing and Green Product Design Strategies in a Sustainable Supply Chain Considering Government Subsidy and Different Channel Power Structures," Sustainability, MDPI, vol. 13(22), pages 1-26, November.
    36. Thang Ngoc Nguyen & Chris Rowley & Gary N. McLean & Huong Thi Thu Nguyen & Thanh Xuan Nguyen, 2024. "Top management support, green training and organization’s environmental performance: the electric power sector in Vietnam," Asia Pacific Business Review, Taylor & Francis Journals, vol. 30(4), pages 833-849, August.
    37. Astrid Rudyanto & Sylvia Veronica Siregar, 2018. "The effect of stakeholder pressure and corporate governance on the sustainability report quality," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 34(2), pages 233-249, May.
    38. Ahmed Saber Moussa & Mahmoud Elmarzouky & Doaa Shohaieb, 2024. "Green Governance: How ESG Initiatives Drive Financial Performance in UK Firms?," Sustainability, MDPI, vol. 16(24), pages 1-25, December.
    39. Mahmoud Elmarzouky & Khaled Hussainey & Tarek Abdelfattah, 2022. "The key audit matters and the audit cost: does governance matter?," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 31(1), pages 195-217, December.
    40. Lorenzo Simoni & Laura Bini & Marco Bellucci, 2020. "Effects of social, environmental, and institutional factors on sustainability report assurance: evidence from European countries," Meditari Accountancy Research, Emerald Group Publishing Limited, vol. 28(6), pages 1059-1087, April.
    41. Suhong Li & Thomas Ngniatedema & Fang Chen, 2017. "Understanding the Impact of Green Initiatives and Green Performance on Financial Performance in the US," Business Strategy and the Environment, Wiley Blackwell, vol. 26(6), pages 776-790, September.
    42. Petra Andries & Ute Stephan, 2019. "Environmental Innovation and Firm Performance: How Firm Size and Motives Matter," Sustainability, MDPI, vol. 11(13), pages 1-17, June.
    43. Joseph Amankwah‐Amoah & Johnny Syllias, 2020. "Can adopting ambitious environmental sustainability initiatives lead to business failures? An analytical framework," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 240-249, January.
    44. Min Xue & Francis Boadu & Yu Xie, 2019. "The Penetration of Green Innovation on Firm Performance: Effects of Absorptive Capacity and Managerial Environmental Concern," Sustainability, MDPI, vol. 11(9), pages 1-24, April.
    45. Sana, Shib Sankar, 2020. "Price competition between green and non green products under corporate social responsible firm," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    46. Kamyar Kianpour & Maryam Asghari, 2012. "Importance of Price for Buying Environmentally Friendly Products," Journal of Economics and Behavioral Studies, AMH International, vol. 4(6), pages 371-375.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alexey Litvinenko, 2023. "A Comparative Analysis of Altman's Z-Score and T. Jury's Cash-Based Credit Risk Models with The Application to The Production Company and The Data for The Years 2016-2022," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 22(3), pages 518-553, September.
    2. Mark M. Davis & Euthemia Stavrulaki & Adi Wolfson, 2018. "A Framework for Increasing Sustainability in Services," Service Science, INFORMS, vol. 10(2), pages 139-153, June.
    3. Khaldoon Albitar & Mahmoud Elmarzouky & ATM Enayet Karim & Ali Meftah Gerged, 2025. "COVID‐19, Board of Directors and Pessimism in Annual Reports: An Intention to Mitigate Litigation Risk," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 3187-3200, July.
    4. Fadi Alkaraan & Mohammad Albahloul & Tony Abdoush & Mahmoud Elmarzouky & Nadia Gulko, 2024. "Big Four Rhetorical Strategies: Carillion's Collapse," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 23(2), pages 295-316, June.
    5. Patrick Velte, 2025. "Audit Quality and Materiality Disclosure Quality in Integrated Reporting: The Moderating Effect of Carbon Assurance Quality," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(3), pages 3785-3801, May.
    6. Silvia Ruiz & Silvia Romero & Belen Fernandez‐Feijoo, 2021. "Stakeholder engagement is evolving: Do investors play a main role?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1105-1120, February.
    7. Kameleddine B. Benameur & Mohamed M. Mostafa & Ahmed Hassanein & Mohammed Z. Shariff & Wasim Al-Shattarat, 2024. "Sustainability reporting scholarly research: a bibliometric review and a future research agenda," Management Review Quarterly, Springer, vol. 74(2), pages 823-866, June.
    8. Ayça Kubra Hizarci‐Payne & İlayda İpek & Gülüzar Kurt Gümüş, 2021. "How environmental innovation influences firm performance: A meta‐analytic review," Business Strategy and the Environment, Wiley Blackwell, vol. 30(2), pages 1174-1190, February.
    9. Sujatha Ravinarayana Bhat & Mohd Asrul Affendi Abdullah, 2023. "Factors Influencing Sustainability Reporting Practices among Listed Companies in Oman," International Journal of Economics and Financial Issues, Econjournals, vol. 13(3), pages 74-83, May.
    10. Praphada Srisuwan & Trairong Swatdikun & Shubham Pathak & Lidya Primta Surbakti & Alisara Saramolee, 2024. "Factors Influencing Key Audit Matter Reporting in the Stock Exchange of Thailand: Empirical Evidence from 2016–2020 Data," JRFM, MDPI, vol. 17(11), pages 1-18, November.
    11. Herenia Gutiérrez‐Ponce, 2023. "Sustainability as a strategy base in Spanish firms: Sustainability reports and performance on the sustainable development goals," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(4), pages 3008-3023, August.
    12. Liliana Nicoleta Simionescu & Ștefan Cristian Gherghina & Ziad Sheikha & Hiba Tawil, 2020. "Does Water, Waste, and Energy Consumption Influence Firm Performance? Panel Data Evidence from S&P 500 Information Technology Sector," IJERPH, MDPI, vol. 17(14), pages 1-31, July.
    13. Charl de Villiers & Jing Jia & Zhongtian Li, 2022. "Corporate social responsibility: A review of empirical research using Thomson Reuters Asset4 data," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(4), pages 4523-4568, December.
    14. Najeb Masoud, 2025. "Moderating Effect of Sustainable Innovation on Internal Audit Effectiveness and Sustainability Auditing Practices: Evidence from Libya’s Public Sector," IJFS, MDPI, vol. 13(2), pages 1-24, April.
    15. Paulo Pereira Silva, 2025. "Non-financial disclosure and stock price informativeness: the role of country-level institutional factors," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 39(2), pages 225-258, June.
    16. K. R. Suprabha & J. Sreepriya & Krishna Prasad, 2025. "The impact of ESG disclosure on mitigating financial distress: exploring the moderating role of firm life cycle," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 22(3), pages 577-590, September.
    17. Joanna Krasodomska & Ewelina Zarzycka & Paweł Zieniuk, 2024. "Voluntary sustainability reporting assurance in the European Union before the advent of the corporate sustainability reporting directive: The country and firm‐level impact of Sustainable Development G," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 1652-1664, June.
    18. Arru Brunella & Delrio Federico & Furesi Roberto & Pulina Pietro & Fabio Albino Madau, 2025. "Role of environmental, social and governance disclosure in business profitability and cost of debt: An analysis of small Southern Italian agri‐food businesses," Agribusiness, John Wiley & Sons, Ltd., vol. 41(3), pages 856-895, July.
    19. Nusirat Ojuolape Gold & Fauziah Md. Taib & Yaxin Ma, 2022. "Firm-Level Attributes, Industry-Specific Factors, Stakeholder Pressure, and Country-Level Attributes: Global Evidence of What Inspires Corporate Sustainability Practices and Performance," Sustainability, MDPI, vol. 14(20), pages 1-28, October.
    20. Le Wang & Zhen He & Shuguang He, 2023. "Quality differentiation and e‐tailer's choice between reselling and agency selling," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(6), pages 3518-3536, September.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:snbeco:v:5:y:2025:i:10:d:10.1007_s43546-025-00919-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.