The present paper, using the undisclosed internal control over financial reporting(ICFR)review fee data, investigates whether firm characteristic variables exhibit differential explanatory power over audit fees despite their many overlapping features. Given that Korean firms started to adopt actively the ICFR system since 2004, it has reached a critical juncture in its effort to evaluate empirically the effectiveness of the adopted system. Also, unlike the external audit service in which the targeted audit risk should come into play, ICFR review is relatively free from such audit risk in analyzing the relationship between ICFR review fee and its determining firm characteristics. Our study, which examined cross-sectional determinants of ICFR review fee and wether there exists substitutability between ICFR review fee and financial statement audit fee, has never been done before in Korea. The empirical analysis used data from 94 auditee firms during 2007-2009 period. A Big 4auditor firm in Korea performed external audits and ICFR reviews for all 94 sample firms. After eliminating some yearly data due to data availability, 144 firm-year data were obtained from the sample firms for the analysis. Firm-year observations are almost evenly distributed among 28 industries. Over the sample period, the average ICFR review fee and audit fee is 17million Won, 138 million Won, respectively. The average ICFR review fee is about 12.3% of the average audit fee. Despite many of the overlapping features between financial statement audit and ICFR review, the two do not exhibit price substitutability. That is, the auditee firms pay statistically significant amount of ICFR review fees over and beyond extant audit fees. In other words, the external audit fees do not decrease despite of firms paying ICFR review fee in addition to external audit fees. This clearly shows auditee firms purchasing different service from the audit firm at least in the early years of adoption. We classified the explanatory variables into auditor litigation risk variables and some governance related variables. The latter is again sub-grouped into BOD (board of directors)composition-related, ownership-related, and audit committee-related variables. Auditor litigation risk is proxied by whether a firm has an officer and director insurance(ODI). BOD independence is measured by the percentage of outside directors. A dummy variable is used to proxy BOD expertise. If there is at least one accounting expert on the board, the dummy variable takes the value of 1, otherwise 0. Potential agency costs faced by an auditee firm is measured by the firm's ownership structure. Two proxy variables are used: the first one is the shareholding percentage of the largest owner, and the second one is the management shareholdings. The last governance-related variable represent whether the firm has an audit committee. Several control variables are added to the ICFR review fee model. They are firm size, growth rate, and the number of subsidiaries. We expect the following relationship between ICFR review fee and explanatory variables. Positive relations are expected for ODI, BOD independence, BOD expertise, audit committee presence, firm size, growth rate, and the number of subsidiaries. Negative relation is expected for the potential agency cost variables, the largest owner's shareholdings and managers' shareholdings. Ceteris paribus, firms with higher litigation risks, external director ratios in BOD and lower major shareholder's ownership ratios and non-owner manager firms exhibited higher payment for the ICFR review service. The presence of an accounting expert in BOD did not have any explanatory power. These results are consistent with the extant agency costs explanation of major shareholder's monitoring effect and shareholder/ non-owner manager agency costs. Also,the presence of the audit committee did not render additional explanatory power. Regarding firm characteristic variables, the sample firms with larger size and more subsidiary firms paid higher ICFR review fees. ICFR review fee and external audit fee data are independently regressed on the same explanatory firm variables. In the ICFR review fee regression, clientelle variables such as litigation risk, external directors ratio, management type, major shareholding ratio exhibit significant explanatory power. In contrast, in the audit fee regression, structural variables such as firm size, asset growth rate, and the number of subsidiaries display significant explanatory variables. The result is consistent with the argument that firms have to accept their audit risks as given and determine the audit fees accordingly, whereas firms do not have to consider audit risks when determining their ICFR review fees. This may shed light on why prior research document conflicting evidence on the relationship between audit fee and firm clientelle variables. Our study, which is the first one using ICFR review fee data, contributes to better understand the determinants of ICFR review fee, and also offers some helpful insights to establish ICFRrelated policy in the new IFRS regime. However, this study has some limitations due to the small sample obtained from a single Big 4 firm.