Do auditors respond to clients’ consumer complaints? Evidence from audit fees

This study investigates whether auditors incorporate consumer complaints into audit risk assessments and pricing decisions. Drawing on data from the Black Cat Complaint Platform, a leading online consumer complaint platform in China, evidence shows that firms with more complaints pay significantly higher audit fees. The effect is more pronounced among non-Big 4 auditors and auditors with lower industry expertise. Audit fees are also higher when complaints involve larger monetary amounts or remain unresolved, and both product-related and experience-related complaints are positively associated with audit fees. In addition, the evidence suggests that auditors expend more effort in response to consumer complaints.