This study aims to design a chain mediation model to investigate the effect of digital technology risk exposure on audit fees. Moreover, it highlights the possible mechanisms and moderators underlying this relationship.
The auditor’s sense of responsibility and effort is taken as the mediators, according to psychological contract and audit risk theories. The study also has examined the moderating effects of external pressures (such as the regulation strength of information security and public concern) and internal pressures (including audit engagement complexity and auditor reputation). The study also finds that audit committee regulation, the digital transformation of audit firms, CEOs with IT background, and auditor industry specialization mitigate the effects.
The positive and significant connection between exposure to the risk digital technology and audit fees is revealed by the findings. This relationship is mediated by both auditors’ sense of responsibility and effort, along with their sequential chain. Both external and internal stresses exacerbate the above positive association. It has also been found that the relationship is negatively moderated by audit committee regulation, audit firm digital transformation, CEOs with IT backgrounds and auditor industry specialization.
This study contributes to research in the field of digital transformation by illustrating the impact of digital technology risk exposure on audit pricing, incorporating psychological contract theory into audit risk theory and demonstrating how the security of digital construction affects audit fees.
