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Corporate social responsibility and non-audit service fees

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  • Jong-Yu Paula Hao
  • Fei Kang
  • Chia-Ling Lee

Abstract

In this study, we examine the association between corporate social responsibility (CSR) and the purchase of non-audit service (NAS). Due to the information asymmetry between stakeholders and managers, stakeholders are generally concerned about auditor’s independence and the firms’ reporting quality. We argue that firms engaging in CSR are more concerned about meeting stakeholder expectations and protecting their reputation of being socially responsible; therefore, they tend to purchase less NAS due to the concern of impaired audit quality. Consistent with our argument, we find that firms with higher CSR ratings incur lower NAS fees. We also document that the negative association of CSR-NAS fees is stronger for firms facing greater stakeholder demand, those with more reputation concerns, and those subject to higher litigation risk.

Suggested Citation

  • Jong-Yu Paula Hao & Fei Kang & Chia-Ling Lee, 2023. "Corporate social responsibility and non-audit service fees," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 30(5), pages 1327-1349, September.
    • Handle: RePEc:taf:raaexx:v:30:y:2023:i:5:p:1327-1349
    DOI: 10.1080/16081625.2021.1976228
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