The Implementation of the New Environmental Protection Law and Audit Fees ()
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.
Share and Cite:
Chen, Q. (2020) The Implementation of the New
Environmental Protection Law and Audit Fees.
Modern Economy,
11, 273-291. doi:
10.4236/me.2020.112024.