by Xiao Yu Yu and Khee Su Bae
This study systematically explores the dynamic relationship between related party transactions, corporate governance mechanisms, and audit quality in a sample of Chinese A-share nonfinancial listed companies from 2019-2023. Based on the agency theory and information asymmetry theory, we constructed an integrated framework of "external supervision and internal checks and balances", and examined the synergistic effects of foreign shareholding (QFII), audit committee (ACS), and independent directors (BOD) on related party transactions (RPT) and audit quality (LnAQ) through quantitative analysis. The study finds that: (1) the size of related party transactions (LnRPT) has a significant positive effect on audit fees (β=0.008, p<0.001), but governance mechanisms moderate its effect; (2) the professionalism of audit committees significantly amplifies the audit costs of related party transactions through enhanced verification procedures (β=0.001, p<0.001), reflecting the "high input-quality" logic; (3) the monitoring role of independent directors pushes up the cost (β=0.019, p < 0.001) but the effect is weak, reflecting its focus on compliance rather than technical details; (4) the moderating effect of qualified foreign institutional investor fails to pass the test, highlighting the limitations of governance by outside shareholders in emerging markets; (5) firm size (LnSIZE)is a core driver of audit fees (β=0.73, p < 0.001), far exceeding other variables. The study breaks through the traditional linear pricing assumption and reveals the chain transmission mechanism of "transaction attributes-governance capability-audit pricing", which provides theoretical support and practical inspiration for the optimization of corporate governance and the prevention and control of audit risk in emerging markets. Meanwhile, the study also points out the limitations of the sample selection bias and the precision of variable measurement, and suggests that in the future, we should take into account the heterogeneity of the industry and the institutional context to study the impact of audit pricing in the future. It is Econ Dev Glob Mark 2 recommended to deepen the research in the future, taking into account the heterogeneity of the industry and institutional context. >