Artificial intelligence applications and audit fees: An empirical study

Abstract

With the rapid integration of artificial intelligence (AI) technologies into corporate finance and governance, their economic implications for auditing have garnered increasing attention. This study employs a sample of Chinese A-share listed companies from 2011 to 2022 to empirically examine the impact of corporate AI adoption on audit fees and the underlying mechanisms. The findings reveal that AI adoption significantly reduces audit fees. Mechanism tests indicate that AI applications mitigate information asymmetry and enhance the quality of accounting information, thereby lowering audit fees. Furthermore, the study identifies that management expense levels and asset intensity exert significant negative moderating effects on this relationship, with the fee-reduction effect of AI being more pronounced in state-owned enterprises. This research extends the literature on the economic consequences of AI technology in external corporate governance and provides empirical insights for risk pricing and procedural adjustments in the audit industry amidst digital transformation.