In recent years, low balling behavior of audit firms has occurred frequently. Its economic consequences have drawn an extensive attention. From the perspective of litigation risk, this paper empirically examines the impact of low balling behavior of audit firms on corporate earnings management. We find that, companies audited by audit firms with low balling behavior have higher earnings management, and this relation is mainly driven by the non top ten audit firms. When the litigation risk increases, the positive correlation between low balling and corporate earnings management weakens. This moderating effect of the litigation risk mainly exists in firms audited by the non top ten audit firms and firms with positive earnings management. These results show that, compared with large audit firms, low balling behavior of small audit firms has more serious economic consequences in aggravating corporate earnings management, and high litigation risk can alleviate the adverse consequences of this behavior. Therefore, to restrain corporate earnings management, the audit pricing behavior of small audit firms should be regulated in a targeted manner, and the litigation costs of low balling behavior should be increased.