The important action in the taxation area has been asked to implement the tax administrative penalty discretion standards as an important reform of local taxation department enforcement in the processing of the construction of law-based government in China. Prior studies of tax enforcement fail to consider the impact of the normalization of tax enforcement on audit pricing from the perspective of the tax administrative penalty discretion standards. In fact, based on the perspective of the tax administrative penalty discretion standards, on the one hand, the normalization of tax enforcement has fully absorbed the predisposing factors of tax enforcement, clarified the specific standards of taxation offences, strengthened the legal deterrence of tax enforcement, and further prompted auditors to reduce corporate tax violation risks by increasing auditing input in corporate tax-related projects. On the other hand, the normalization of tax enforcement could improve the tax enforcement system to some extent, curb the rent-seeking possibility of the collusion between tax supervisors and firms, significantly expose corporate tax violation risks, and further reduce corporate tax violation risks by increasing auditing input after the external environment is broken from the collusion between taxpayers and tax supervisors. Therefore, the normalization of tax enforcement may impact audit pricing.

Based on a quasi-natural experiment from province-level practice of the Tax Administrative Penalty Discretion Standards since 2016, this study explores the relationship between the normalization of tax enforcement and audit pricing. It shows that compared with the ex-ante period of the tax administrative penalty discretion standards implemented in every province, in the ex-post period of the tax administrative penalty discretion standards implemented in every province, the positive relationship is more pronounced between the normalization of tax enforcement and audit pricing. Moreover, the former relationship is more pronounced in firms with more tax avoidance and collusion between tax supervisors and firms. As a result, as the tax administrative penalty discretion standards are implemented, the normalization of tax enforcement can increase corporate audit pricing.

This study makes several contributions as follows: Firstly, it broadens the horizon of tax enforcement research and further enriches the relevant literature of tax enforcement. Above all, this study considers the impact of the normalization of tax enforcement on audit pricing from the predisposing perspective of the tax administrative penalty discretion standards. Secondly, it broadens the horizon of the determinants of audit pricing research and further enriches the relevant literature of the determinants of audit pricing research. Thirdly, the normalization of tax enforcement can positively affect auditors’ audit pricing decisions and further offer beneficial implications for improving the quality of corporate auditing quality.