ESG Performance and Audit Fees: A Case of SET 100 Thailand

At present, the concept of Environmental, Social, and Governance (ESG) has been increasingly adopted as a strategic approach to management, aiming for sustainable growth. This approach influences the audit process and the auditor’s opinion on financial statements, as well as impact audit fee determination. This study investigates the relationship between ESG performance and audit fees among companies listed in the SET100 index of the Stock Exchange of Thailand. Both overall and all dimensions (environmental, social, and governance) were measured using data from the LSEG database. The sample includes 380 firm-year observations over five years from 2019 to 2023. The analysis employed multiple regression models with fixed effects, using STATA statistical software. The results reveal a statistically significant positive relationship between overall ESG performance and audit fees at the 0.01 level of significance. The analysis also found a positive association between the environmental and social dimensions, significant at the 0.05 level. Additionally, as control variables, firms' size and complexity were found to be positively associated with audit fees at the 0.05 significance level. In summary, the findings suggest that ESG performance influences audit scope, resulting in higher audit fees.