The impact of smart audit on green finance: evidence from China

As of today, despite the rocketing of smart technology, whether the use of smart audit as a firm characteristic contributes to sustainable development in a region remains unclear. This paper supplements the extant literature by linking the development of green finance to firms’ adoption of smart audits. Based on the data of Chinese listed companies from 2000 to 2023, the empirical results show the following: (1) Smart audit can improve the provincial development index of green finance. (2) The marginal benefit of smart audit is greater for middle and western companies than eastern companies, for small and medium companies than large companies. (3) This effect is positively moderated by financial constraint and internal control. In light of these findings, firms and policy-makers should attach greater significance to smart audit’s positive effect on promoting green finance, while strengthening its coalescence with the improvement of financial constraint and internal control in order to accelerate realizing the Sustainable Development Goals.