The environmental consequences of national Audit governance: An analysis based on county-level data in China

Recent years have witnessed growing public concern over air pollution in China, posing a challenge to the government's environmental management efforts. Empirical evidence indicates that the digital economy contributes to mitigating environmental pollution. Given that national audits are a crucial part of the national oversight system and considering the significant role of digital technology in audit governance, it is relevant to explore how the digital economy can support national audits in enhancing China's environmental quality. This study investigates the environmental impact of national audit governance, utilizing a dataset from 1540 counties in China spanning from 2005 to 2018. The findings reveal that effective national audits contribute to reducing haze pollution (HP) levels, with the digital economy playing a moderating role. The results also demonstrate heterogeneity; national audits are particularly effective in regions characterized by high urbanization rates, severe HP, and stringent environmental regulations. The mechanism analysis suggests that industrial transformation and enhanced government governance are the key mechanisms through which national audits reduce regional HP. Additionally, reforming the audit management system can amplify the effects of national audits on reducing HP.