Abstract: On the basis of the symbiotic interaction between institutional environment and corporate governance mechanisms,we study the combined influence of marketization and internal control upon governance mechanisms of independent auditing in the context of China's transitional economy. The empirical study shows that companies with the poor internal control are more likely to choose "non-big 10" auditors, which lead to higher audit fee, and are more likely accompanied by the qualify opinions. Moreover, the worse regional marketization process, companies with the poor internal control are prefer to choose regional small CPA firms, which lead to higher audit fee, and have higher probability of receiving qualify opinions. Overall, the findings show that the effect of audit governance requires the interaction of effective internal control and marketization.