dbbeab49-9462-4a51-8a34-4b039c4544bc20250704030403175wseas:wseasmdt@crossref.orgMDT DepositWSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS2224-28991109-952610.37394/23207http://wseas.org/wseas/cms.action?id=40161720251720252210.37394/23207.2025.22https://wseas.com/journals/bae/2025.phpRuiyunWangLyceum of the Philippines University Manila Campus, Intramuros, Manila 1002, PHILIPPINESIrvin R.PeronoLyceum of the Philippines University Manila Campus, Intramuros, Manila 1002, PHILIPPINESDriven by policy and regulatory guidelines, the ESG management capabilities and disclosure standards of Chinese listed companies have steadily improved. This paper uses listed companies with ESG ratings from 2009 to 2021 as a sample to explore the impact of the ESG audit model on earnings management in listed companies. Empirical analysis reveals that there is a significant negative correlation between ESG performance and audit costs, meaning that higher ESG ratings are associated with lower audit fees. Further analysis indicates that strong ESG performance can effectively reduce redundant management, suggesting that robust ESG responsibility can mitigate corporate risks, enhance corporate value, improve operational conditions, and further lower audit costs by curbing redundant management. This study enriches the existing research findings on the relationship between ESG performance and audit costs related to earnings management, providing theoretical basis for how to improve corporate ESG performance and strengthen ESG audit supervision.74202574202514821490119https://wseas.com/journals/bae/2025/c405107-3364.pdf10.37394/23207.2025.22.119https://wseas.com/journals/bae/2025/c405107-3364.pdfGao Y, Huang J, ESG rating performance and corporate true surplus management— Evidence from Chinese A-share listed companies, Financial Development Research, Vol.5, No.1, 2023, pp. 3-12. Liu Y, Cao Y, Li B, The impact of enterprise ESG performance on surplus management behavior, Reform, Vol.1, No.11, 2024, pp. 114-132. Hao Y. ESG performance and corporate earnings management: Evidence from the manufacturing sector 2018–2021, SME Management and Technology, Vol.3, No.11, 2023, pp.64-66. Wang A, Zhang Y, ESG performance, Surplus management and audit expenses, Hebei Enterprise, Vol.1, No.8, 2024, pp. 94-97. Li KL, Qiu SX, Lin ZY, Can enterprise ESG performance inhibit surplus management? - External audit perspective, Journal of Accounting and Finance, Vol.4, No.9, 2024, pp. 48-52. Zhang Z, Will ESG's performance affect the audit quality? Based on empirical research of A-share listed companies in Shanghai and Shenzhen, International Business Accounting, Vol.13, No.21, 2023, pp. 49-53. 10.1016/j.frl.2024.105764Wu, K, Kong D, Yang W, Does environmental, social, and governance rating affect firms’ real earnings management, Financial Research Letter, Vol.67, No. Part A, 2024, pp. 105764. https://doi.org/10.1016/j.frl.2024.105764. 10.3390/su16125100Al Barrak T, Kouaib A, Sustainability commitment versus earnings management practices: Saudi insights, Sustainability, Vol.16, No.12, 2024, pp. 5100. https://doi.org/10.3390/su16125100. 10.1111/jacf.12169Kotsantonis S, Pinney C, Serafeim G. ESG. integration in investment management: myths and realities, Journal of Applied Enterprise Financing, Vol.28, No.2, 2016, pp. 10-16. https://doi.org/10.1111/jacf.12169. 10.3390/su16010124Diab A, Eissa AM., ESG performance, auditor choice, and audit opinion: Evidence from an emerging market, Sustainability, Vol.16, No.1, 2023, pp. 124-124. https://doi.org/10.3390/su16010124.