IDEAS home Printed from https://ideas.repec.org/a/taf/acceur/v21y2024i1p14-43.html
   My bibliography  Save this article

Auditors’ Carbon Risk Consideration under the EU Emission Trading System

Author

Listed:
  • Isabell Keller
  • Brigitte Eierle
  • Sven Hartlieb

Abstract

This paper addresses the effects of clients’ carbon risk on audit pricing. Using data from 438 EU companies for the period 2013–2019, we find a positive relationship between carbon risk (measured by the level of carbon emissions) and audit fees. Furthermore, we find that participation in the European Union’s Emission Trading System, a limited market and regulation scheme to mitigate special industries’ Greenhouse Gas emissions, strengthens the positive relationship between carbon risk and audit fees. Insights from additional tests indicate that auditors price carbon risk particularly for large clients that are under greater public scrutiny and that the increase in fees rather stems from a risk premium charged by the auditor than higher audit effort. With interest in climate change developing rapidly across society, practice and research combined with the increasing importance of reducing carbon risk, our findings are timely and should thus appeal to a wide variety of recipients.

Suggested Citation

  • Isabell Keller & Brigitte Eierle & Sven Hartlieb, 2024. "Auditors’ Carbon Risk Consideration under the EU Emission Trading System," Accounting in Europe, Taylor & Francis Journals, vol. 21(1), pages 14-43, January.
    • Handle: RePEc:taf:acceur:v:21:y:2024:i:1:p:14-43
    DOI: 10.1080/17449480.2023.2256059
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/17449480.2023.2256059
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/17449480.2023.2256059?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 search for a different version of it.

    More about this item

    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:taf:acceur:v:21:y:2024:i:1:p:14-43. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAIE20 .

    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.