Board Size as a Mediator in the Relationship Between Corporate Social Responsibility and Audit Quality: Insights from Europe

Purpose: The purpose of this paper is to investigate how corporate social responsibility and affects audit quality. Design/methodology/approach: The study is based on a sample of 600 European firms over the period 2010 to 2022; the paper uses panel data regressions. This study applied structural equations models that specify both a direct and an indirect link between corporate social responsibility and audit quality. Findings: We find a positive association between CSR and audit quality, meaning that highly rated companies for CSR activities pay more audit fees. In addition, this study shows that board size mediates the relationship between corporate social responsibility and audit quality. Practical implications: The findings may be of interest to the academic researchers, investors, and regulators. For academic researchers, it is interested in discovering the dynamic relation between corporate social responsibility, audit fees, and board size. For investors, our results show that board size mediate the relation between CSR and audit fees. For regulators, our results advise the worldwide policy maker to give the importance of audit quality to improve the engagement firms in corporate social responsibility reporting. Originality/value: The paper extends the existing literature by examining the mediation effect of board size on the relationship between CSR and audit quality in European context. To the authors’ knowledge, no research studies examined empirically the direct and indirect relationship between CSR, audit quality and board size. Therefore, the main contribution of this research is to show how corporate social responsibility affect audit quality measured by audit fees through board size.