Does the Carbon Emissions Trading Pilot Policy Affect Auditor Industry Specialization? Evidence from China and Implications for Sustainability

Vollständiger Abstract

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China’s Carbon Emissions Trading (CET) Pilot Policy may alter corporate information environments and demand for auditors with industry-specific experience. Using the staggered launch of regional carbon markets as a quasi-natural experiment, this study examines whether policy exposure changes auditor industry specialization among Chinese A-share listed firms from 2010 to 2022. Specialization is measured by the logged share of an auditor’s client assets in a given industry; it does not represent an audit-fee premium or direct carbon-assurance expertise. Staggered difference-in-differences estimates show that CET pilot exposure increases this specialization measure. The result is robust to event-study, placebo, propensity-score-matched, and Callaway–Sant’Anna specifications. Channel regressions are consistent with financing-constraint and leverage pathways, while evidence for controlling-shareholder fund occupation is weak and not interpreted as causal mediation. Pairwise tests identify regional differences but no statistically significant ownership or pollution-intensity differences. By linking carbon-market policy to auditor-client matching, the study shows that sustainability policy can reshape the professional-service infrastructure supporting firms’ low-carbon transition. Allocating industry-experienced auditors to policy-exposed firms may strengthen the credibility and comparability of sustainability-related financial information and support regulatory monitoring. These implications concern the institutional capacity for sustainable development; the study does not directly measure sustainability performance or carbon-assurance quality.