The Dimensions and Evaluation of Audit Firms' Social Responsibility: An Analysis of 40 Audit Firms in China

Abstract

Audit firms' development relies heavily on their stakeholders' trust, and responsible business practices are crucial for their sustainable growth. The aim of this article is to analyze the dimensions of corporate social responsibility (CSR) within audit firms and to evaluate their performance in fulfilling CSR. This article takes 40 original securities-qualified audit firms in China from 2013 to 2022 as the sample. Using stakeholder theory, it establishes a CSR evaluation framework covering four dimensions: employees, clients, the government and industry, the environment, and philanthropy. This study applies an integrated evaluation model based on cyclic correction to evaluate these firms' performance in fulfilling CSR. The results show, first, that the CSR performance of audit firms tends to increase, but the overall level remains low; second, employee responsibility outperforms environmental and philanthropic responsibility, reflecting the unbalanced CSR fulfillment characteristics of audit firms; and third, the Big Four audit firms outperform local firms in CSR performance, highlighting the critical roles of the institutional environment and size of the organization in shaping CSR fulfillment. Overall, the level of CSR performance in audit firms is at an early stage, requiring increased regulation and guidance. This article recommends formulating unified CSR guidelines and strengthening policy support and training for audit firms to promote balanced development of CSR within the industry.