The study looked at how changing the legal liability of auditors in China affected the quality of audits and fees charged. When auditors faced unlimited liability, they were more likely to give accurate opinions, prevent clients from manipulating earnings, and charge higher fees. This change had a bigger impact on local auditors and clients controlled by local governments. Overall, the stock prices of clients improved after the reform, showing that increasing legal liability can make audits more valuable in countries with weaker institutional systems and heavy government involvement.