Artificial Intelligence And The Lists’ Audit Fees

This paper studies the relationship between the implementation of AI and audit fees in China’s listed companies.By selecting the balanced panel data of 1563 A-share listed companies from 2013 to 2018,this paper uses the text analysis method to construct whether to implement AI virtual variables,constructs the enterprise time two-way fixed effect model,and uses the double difference method to carry out empirical regression.The empirical results show that the implementation of AI will increase the audit fees of companies.On the one hand,the implementation of AI by listed companies will make auditors face greater risks of material misstatement,including inherent risks and control risks.Facing these higher risks,auditors will increase the audit price and obtain the risk premium.On the other hand,when the risk of material misstatement is greater,auditors need to make greater efforts to implement more audit procedures in order to reduce the inspection risk to an acceptable low level,resulting in an increase in audit costs and an increase in audit fees.Further analysis found that no matter the implementation of AI in the product link or in the operation link,the audit fees increased significantly compared with the enterprises that did not implement AI.According to the sample heterogeneity analysis,the audit fees for the implementation of AI are limited to manufacturing enterprises and non high-tech enterprises.When the office is Big 4,the implementation of AI will not significantly increase the audit cost,while when it is a domestic firm,the audit cost will significantly increase,which shows that the Big 4 can better deal with and adapt to AI technology.This paper verifies the robustness of the empirical conclusions by replacing parallel trend test,psm-did,lagged one-phase regression,considering industry and urban factors,replacing explanatory variables,placebo test and so on,and puts forward a series of policy suggestions on the basis of the empirical conclusions.