This paper examines the impact of advances in communication technology on audit quality and audit fees over the first two decades of the twenty-first century. Using theories on virtual teams from the management literature and distant audits as a setting where auditors and clients are most reliant on communication technology, I hypothesize that advances in communication technology improve audit quality over time for distant audits, specifically, and when compared to local audits. With two measures of audit quality (discretionary accruals and misstatements) and an analysis that identifies three "eras" of communication technology in the 2000s, I find evidence that audit quality has seen statistically significant improvement over time with advances in communication technology for distant audits and that this improvement is statistically significant when compared to local audits as a control group. In an additional test, I find evidence that advances in communication technology also impact audit fees. Specifically, audit fees of distant audits increase over time at a lower rate than local audits suggesting that distant audits benefit more from advances in communication technology. These results are important because they provide evidence that communication technology has benefited audits by increasing quality and reducing fees, particularly for distant audit clients. This is relevant to the current audit environment where firms are considering long-term remote working strategies that will be heavily reliant on these technologies
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