Prior studies show that large audit firms provide better audit quality than their smaller counterparts, because they have better industry-related knowledge and accounting expertise (Dopuch and Simunic 1982). Large audit firms also have greater incentives to deliver better audit quality because their large client base subjects them to greater reputation risk, and their ‘deep pockets’ subject them to greater litigation risk (DeAngelo 1981; Dye 1993; Lennox 1999; DeFond and Zhang 2014). At the same time, it is costly for large audit firms to develop and maintain industry specialization and a brand name reputation, and to compensate they charge their clients an audit fee premium. Prior research has provided evidence of a Big N audit fee premium in the US, the UK, Australia, Hong Kong, and other developed economies, which is consistent with Big N auditors’ delivery of high-quality audits (Palmrose 1986; Pong and Whittington 1994; Craswell, Francis, and Taylor 1995; DeFond, Francis, and Wong 2000; Chaney, Jeter, and Shivakumar 2004). We expand this body of research using recent data from China. The Chinese audit market has undergone dramatic changes since 2007. First, since 2007, all listed companies have been required to adopt a new set of accounting standards, which was recognized by the International Accounting Standards Board (IASB) as having achieved ‘substantial convergence’ with International Financial Reporting Standards (IFRS; IASB 2006) and further recognized as the applicable financial reporting standards in other jurisdictions outside China, including European Union member countries and Hong Kong. A new set of auditing standards comparable to the International Standards on Auditing (ISA) has also been put into effect. China’s adoption of IFRS and ISA led to the China Securities Regulatory Commission’s (CSRC) repeal of dual audit requirements1 in September 2007. Second, the Chinese Institute of Certified Public Accountants (CICPA) announced a comprehensive strategy to accelerate the development of the country’s accounting profession in 2007. The strategy’s goal is to develop within a five- to ten-year period 10 large accounting firms capable of competing internationally and 100 firms of significant scale capable of serving large domestic companies. The State Council and the Ministry of Finance (MOF) formally endorsed CICPA’s strategy in 2009. In the years since, the government has implemented a series of measures2 designed to help domestic accounting firms to grow bigger and stronger and move into overseas markets.