{"title":"Does ESG rating disagreement affect audit opinions?","authors":"Cheng Zhang , Qianyao Zha , Xun Sun , Liping Chen","doi":"10.1016/j.iref.2024.103659","DOIUrl":null,"url":null,"abstract":"<div><div>This paper examines the impact of ESG rating disagreement on audit opinions. We find that ESG rating disagreement significantly increases the probability of auditors issuing modified audit opinions, operational risk and risk of material misstatement play intermediary roles between ESG rating disagreement and audit opinions. Heterogeneity analysis shows that the effect of ESG rating disagreement on audit opinions is more significant among companies with lower institutional investors shareholding ratios, weaker internal control, and private nature. Our research expands the study of economic consequences of ESG rating disagreement and provides policy inspiration for regulators to standardize ESG rating.</div></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"96 ","pages":"Article 103659"},"PeriodicalIF":4.8000,"publicationDate":"2024-09-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Economics & Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1059056024006518","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
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Abstract
This paper examines the impact of ESG rating disagreement on audit opinions. We find that ESG rating disagreement significantly increases the probability of auditors issuing modified audit opinions, operational risk and risk of material misstatement play intermediary roles between ESG rating disagreement and audit opinions. Heterogeneity analysis shows that the effect of ESG rating disagreement on audit opinions is more significant among companies with lower institutional investors shareholding ratios, weaker internal control, and private nature. Our research expands the study of economic consequences of ESG rating disagreement and provides policy inspiration for regulators to standardize ESG rating.
期刊介绍：
The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.
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