^aTo assess potential selection bias, we compare firm size and profitability between our final sample (N = 10,233) and the full Compustat universe (N = 128,739). We find that our final sample firms are significantly larger (Mean SIZE = 8.224 vs 5.680) and more profitable (Mean ROA = 0.111 vs –0.374), both significant at p < 0.001. This limitation arises from the data requirements across multiple databases – AuditAnalytics, Compustat, Execucomp and BoardEx. Consequently, while our sample may not generalize to smaller or financially constrained firms, the findings remain robust and most relevant to large, well-established firms with complex governance structures that face greater auditor scrutiny and higher audit fees. Panel B: The industry classification follows Dopuch et al. (1987): Agriculture, forestry and fishing (SIC code 100–999); Mining (SIC code 1000–1499); Construction (SIC code 1500–1999); Manufacturing (SIC code 2000–3999); Transportation and utilities (SIC code 4000–4999); Wholesale (SIC code 5000–5199); Retail (SIC code 5200–5999); Services (SIC code 7000–8999); Others (SIC code < 100 or > 8999). The definition and measurement of the variables are described in  Appendix. Panel C: The Violation Tracker database categorizes non-financial violations into Eight groups: competition, consumer protection, employment, environment, government contracting, health care, workplace safety and miscellaneous. Following Raghunandan (2021), employment and workplace safety are grouped under labor, while consumer protection and environment remain unchanged. Government contracting, health care, competition and miscellaneous are categorized as other