Building a unified and open capital market with orderly competition is the key to achieving economic development. The basic securities law is the foundation for the construction of an effective capital market. The promulgation of the New Securities Law of the People’s Republic of China on December 28, 2019 is an essential course in the construction of the legal infrastructure to regulate the behavior of participating entities in the capital market. However, as one of the vital objects regulated by the New Securities Law, the topic of whether auditors will adjust audit fees accordingly and optimize their auditing behaviors to enhance the quality of audit services has not been concerned by the existing research.

Based on the legal infrastructure perspective of the promulgation of the New Securities Law, this paper selects A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2016 to 2021 as the research sample to examine the impact of the implementation of the New Securities Law on audit fees. It is found that the implementation of the New Securities Law can significantly increase the level of audit service fees. The findings remain valid after a series of endogeneity and robustness tests. Mechanism testing indicates that the decrease of audit market concentration and the increase of disciplinary risk are the core mechanism approaches. Further research implies that the effect of the implementation of the New Securities Law on audit fees is more prominent under the coordinated cooperation of inquiries by the stock exchange, interviews by the CICPA, and media attention.

This paper makes the following contributions: First, it systematically studies the impact of the implementation of the New Securities Law on audit fees, which enriches the relevant research on the effect of the implementation of the New Securities Law in the audit industry market, and strongly supplements the relevant research on the influencing factors of audit fees. Second, it improves the coordination theory system of supervision subjects in the implementation of the New Securities Law, which provides a reference for the capital market supervision parties to further standardize the audit market charging behavior and optimize the audit market order according to the new Securities Law. Third, it is of great practical significance for conscientiously implementing the New Securities Law, optimizing the order of the audit service market, preventing and controlling audit risks, and promoting the effectiveness of the capital market.