Auditors will charge a company more just because they're getting bad press, even if their books are perfectly clean.
March 20, 2026
Original Paper
Diverse Effects of Different Types of Media Coverage on Audit Fees: Evidence Based on Media Tones
SSRN · 6312158
The Takeaway
Auditors are essentially charging a 'reputation tax' on clients who attract sensationalist or negative headlines. They increase their prices not because the accounting is harder, but to protect themselves from the business risk of being associated with a 'loud' or controversial company.
From the abstract
This paper investigates the relationship between different types of media coverage and audit fees. We theoretically and empirically distinguish between the media's information and monitoring role resulting from impartial, neutral coverage, which is associated with lower audit risk, and the media's attention-grabbing role resulting from sensational or biased reporting, which is associated with higher auditor business risk. Using data from US public firms between 2003 and 2021, we find that client