This study examines whether comment letters have spillover effects on audit fees. Examining listed companies in China, we find that the frequency of comment letters received by peer firms is positively associated with firms audit fees. The spillover effect is stronger when: (1) companies have the same audit firm as their peers; (2) a comment letter is longer or contains more risk information. Furthermore, the effect is significantly higher (lower) for companies with higher growth (audited by Big Four audit firms). Our findings suggest that comment letters have regulatory effectiveness, which influences companies and auditors behavior on a large scale.