The Audit Pricing Implications of the CSRD: Evidence from Listed European Firms

Sammanfattning

This thesis examines whether the implementation of the Corporate Sustainability Reporting Directive (CSRD) affects audit fees among listed European firms. Using a firm-year panel dataset from 2017 to 2025 and a difference-in-differences research design, the study compares firms directly subject to CSRD-related reporting requirements with non-mandated firms before and after the directive’s initial implementation. The findings show that mandated firms experience a significant audit fee increase of approximately 6.6% after CSRD implementation, suggesting that mandatory sustainability reporting and assurance requirements raise audit effort, complexity, and engagement risk. However, the evidence does not support a distinct spillover effect on listed SMEs, nor does it show a significantly stronger effect for environmentally sensitive industries. Further analysis indicates that stronger pre-existing Environmental and Social performance mitigates the CSRD-related audit fee increase, while aggregate ESG performance is not significant. Overall, the study provides early empirical evidence that CSRD implementation increases audit pricing, particularly for directly mandated firms.