Taiwan Financial Supervisory Commission (FSC) mandated public firms meeting certain requirements to disclose audit fees and encouraged other firms to voluntarily disclose audit fees since 2002. This study investigates the impact of disclosure of audit fee on subsequent audit pricing. Based on audit fee information disclosed from 2002 to 2004, this study finds that clients which were overcharged (undercharged) in prior period have lower (higher) audit fees in the next period. In addition, this study finds that client importance also affects the adjustment of audit fee. When important clients were overcharged in the previous period, they asked fee reductions in the subsequent period. In sum, our results show that the disclosure of audit fee did not result in the price war in Taiwan but reduced audit fee dispersion. Therefore, we suggest that Taiwan FSC should consider mandating audit fee disclosure for all public firms.