Fluctuations in investor sentiment will cause a firm，s stock price to systematically deviate from its fundamentals.However,there is limited evidence on whether it affects the level of auditor engagement risk and audit pricing.Based on the data from 2007 to 2018,this paper attempts to extend the literature by investigating whether and how investor sentiment affects audit fees.The result shows that investor sentiment is positively associated with audit fees,and the fee increase during high sentiment periods is more pronounced for firms with higher business risks and for firms with lower information transparency.This paper also identifies two possible mechanisms through which investor sentiment affects audit fees:reduced investment efficiency and decreased sensitivity of managerial compensation to firm performance. Overall, our results suggest that auditors may invest more audit cost or charge a fee premium in response to higher investor sentiment in order to mitigate potential engagement risks, which leads to an increase in audit fees and audit quality.Our findings should be of interest to auditors who actively manage engagement risks and to regulators who are interested in mitigating the effects of investor sentiment on the real economy.