When Auditors Become Rent-Seekers: Information Advantages in the Digital Age

The ongoing digital transformation of enterprises is reshaping the audit information environment and shifting informational power between auditors and corporate management. Building on information asymmetry theory, rent extraction theory, and corporate governance theory, we develop a theoretical framework to examine how digital transformation affects audit pricing and its underlying mechanisms. Using data from Chinese listed firms between 2012 and 2019, we find that digital transformation significantly increases audit fees, with the effect intensifying as digitalization deepens. Mechanism analyses indicate that the fee premium does not arise from increased audit complexity, but rather from auditors’ enhanced informational advantage, which strengthens their bargaining power and facilitates implicit collusion, leading to extended audit engagement periods and the extraction of information rents. The effect weakens in firms with higher digital transparency but is more pronounced in firms with low financing constraints and higher state ownership, where greater digital investment fosters relational stickiness. Moreover, audit committees with stronger digital competence effectively constrain auditors’ informational power and suppress fee inflation. Overall, this study uncovers the information advantage–relational stickiness–rent extraction mechanism underlying the “digital auditing paradox” and provides new governance insights for regulating audits in the digital era.