Work

Do auditors charge clients with higher audit fees for blockchain investments?

Year: 2025

Type: article

Abstract: This study examines the impact of clients’ blockchain investments on audit fees. Using a sample of A-share Chinese listed firms spanning the 2015–2019 period, we find a positive association between blockchain investments and audit fees, which is stronger for client firms that have adopted blockchain than those that have only invested in this technology. Our channel analysis further reveals that higher audit fees stem from the increase in client firms’ audit risk and the greater effort in audit planning and execution by the auditors. The positive association between blockchain investments and audit fees is attenuated by audit firms’ extensive information technology (IT) experience and is intensified by considerable external attention to clients’ blockchain activities. Our results are robust to a battery of endogeneity and other robustness checks. This research casts new light on the interactions between disruptive technologies and external auditor practices, as reflected in audit fees.

Source: Journal of International Accounting Auditing and Taxation

DOI: 10.1016/j.intaccaudtax.2025.100707

Authors: Jean Jinghan Chen, Lingyu Huang, Jason Zezhong Xiao, Haoyu Zhang

Institutions: University of Kent, Guangxi University, University of Macau, University of Leeds

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,490

Funders: National Natural Science Foundation of China, Universidade de Macau