This paper uses the empirical data of listed companies in China from 2007 to 2013 to examine the relationships between abnormal audit fees and accruals (audit quality), and tries to find out the mechanism and the consequences of abnormal audit fees affecting accruals (audit quality). The research found that abnormal audit fees were negatively correlated with accruals. After taking the positive and negative nature of the abnormal audit expenses into consideration, research found that the abnormal audit fee reflects the economic bond between the auditor and the company, which impair the independence of auditors and degrade the audit quality. Negative audit fees reflect strong bargaining power of companies, and lower audit fees impel auditors to reduce audit effort, control audit costs to achieve a certain profit target, which will also degrade audit quality.
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