Can Vertical Integration of the Supply Chain Reduce Audit Fees?
QIN Jie1, YANG Qiang2, SUN Qian3, ZHANG Wenyu3
1. School of Economics, Nanjing Audit University, Nanjing 211815, China; 2. School of Business, Nanjing Audit University, Nanjing 211815, China; 3. School of Economics and Management, Nanjing University of Science and Technology, Nanjing 210094, China
Abstract Taking China’s A-share listed companies from 2008 to 2023 as the research objects, this paper examines the impact of vertical integration of supply chains on audit fees from the perspective of vertical integration. The research findings show that vertical integration of the supply chain can significantly reduce audit fees, highlighting the important role of supply chain specialization and integration in enhancing corporate cost-effectiveness. The mechanism test demonstrates that the level of vertical integration in the supply chain mainly exerts a mitigating effect on audit fees through two channels: “ reducing operating risks ” and “ reducing information asymmetry”. The results of the heterogeneity analysis indicate that the mitigating effect of supply chain vertical integration on audit fees is more pronounced when a firm’s external transaction costs are higher or its internal control costs are lower. The study not only deepens the research on the economic consequences of vertical integration in the supply chain, but also further expands the boundaries of research on the determinants of audit fees. Additionally, it provides empirical evidence and theoretical support for enterprises to optimize their supply chain resource allocation and leverage cost advantages in audit fees.
2025, Vol. 42 
