Audit Quality and Audit Fees in China

Authored by: Feng Liu , Fan Ye , Xiaoxiao Yu

The Routledge Companion to Accounting in China

Print publication date:  September  2018
Online publication date:  September  2018

Print ISBN: 9781138678538
eBook ISBN: 9781315558899
Adobe ISBN:


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This paper introduces China’s audit market. First, we briefly describe audit reports, opinions, audit fees and the regulatory environment in China. Second, we discuss some distinctive features of the market that may affect audit quality and audit fees. We find that Chinese audit firms have expanded their size quickly because of regulatory intervention but that their market concentration is still low. Individual auditors pay more attention to their clients and to personal risk. Engagement risk mainly arises from changes of organizational form and punishments by the CSRC. The policy of mandatory rotation has been adopted but may be evaded. Finally, we discuss the research framework and give some directions for future China-related auditing research.

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