This study examines how board faultlines, subgroup divisions arising from directors’ demographic and experiential attributes, affect audit fees in Chinese listed firms. Using 28,528 firm-year observations of A‑share companies from 2008 to 2021, board faultlines are quantified with the Average Silhouette Width (ASW) algorithm based on ten director characteristics. Ordinary least squares regression forms the main empirical approach, while mediation is assessed through financial reporting quality and audit report lag. Endogeneity concerns are addressed using instrumental variables and inverse probability matching. The results show a significant negative association between board faultlines and audit fees, indicating that subgroup dynamics may enhance monitoring and reduce auditors’ perceived risk in China’s concentrated ownership environment. Both financial reporting quality and audit report lag partially mediate this relationship. The effect is stronger in firms with qualified foreign institutional investors, whereas demographic changes following the One‑Child Policy do not materially alter the association. The study contributes new evidence on how internal board structures influence audit pricing.