Increasing audit effort through the public disclosure of audit hours: insights from ESG ratings in South Korea

Mali, Dafydd and Lim, Hyoung Joo (2026) Increasing audit effort through the public disclosure of audit hours: insights from ESG ratings in South Korea. Journal of Applied Accounting Research. ISSN 0967-5426

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Abstract

Purpose: Based on the assertion that audit hours/effort enhances audit quality, we posit that as ESG ratings increase, shareholders have an incentive to secure increasing levels of audit hours as an ESG rating assurance strategy (audit demand theory). Design: Using a sample of South Korean listed client-firms over the 2011-2019 period, the study captures the association between ESG, i) audit hours, ii) audit fees, and iii) fees per hour. Results: Empirical results show that clients with higher ESG ratings secure increasing levels of audit effort/hours. Moreover, based on ESG status, no fee premium is imparted by audit firms. Results are robust to various forms of additional analysis including Big4/NonBig4 division, endogeneity tests, amongst others. Contributions - value: The study contributes to policymaking by reporting that in a rare instance of audit hour information availability on annual reports, a basis exists for clients to secure increasing levels of audit hours, as an ESG rating assurance strategy. The study therefore extends the ESG assurance and audit literatures.

Item Type:	Article
Uncontrolled Keywords:	esg,forecasting, effort,audit demand theory,esg assurance,3* ,/dk/atira/pure/researchoutput/REFrank/3_
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
Depositing User:	LivePure Connector
Date Deposited:	25 Mar 2026 15:30
Last Modified:	25 Mar 2026 15:30
URI:	https://ueaeprints.uea.ac.uk/id/eprint/102576
DOI:	10.1108/JAAR-12-2024-0492

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