The governance role of R&D specialist auditors: Evidence from discretionary R&D expenditure

IF 2.8 3区 管理学 Q2 BUSINESS, FINANCE
Eugenia Y. Lee, Wonsuk Ha
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引用次数: 0

Abstract

Purpose

This study aims to examine whether auditors who specialize in research and development (R&D) activities help reduce managers’ opportunistic adjustment of R&D expenditure for real earnings management (REM).

Design/methodology/approach

Using a sample of US firms during the 2001–2017 period, the authors identify auditors’ R&D specialization as their prior experience of auditing R&D expenses spent by each client’s peers. The authors measure R&D-based REM as the negative deviation from the predicted level of R&D expenditure.

Findings

The authors find that clients of R&D specialist auditors are less likely to engage in REM through a discretionary reduction of R&D expenditure. This effect is more pronounced when clients face higher competition, have larger investment opportunities and entail higher audit risks.

Practical implications

This study shows that auditors’ specialized knowledge can facilitate stronger monitoring of clients’ real decisions, providing implications for auditors’ knowledge acquisition and transfer in specific types of transactions.

Originality/value

This study contributes to the literature by documenting the governance role played by R&D specialist auditors in clients’ real economic decisions. Moreover, the study identifies R&D as a distinct area of auditor specialization.

研发专业审计师的治理作用:可自由支配的研发支出的证据
本研究旨在探讨专门从事研究与开发(R&D)活动的审计师是否有助于减少管理者为进行实际收益管理(REM)而对 R&D 支出进行机会主义调整。作者使用 2001-2017 年期间的美国公司样本,将审计师的 R&D 专业化确定为他们审计每个客户同行 R&D 支出的先前经验。作者将基于 R&D 的 REM 量度为与 R&D 支出预测水平的负偏差。研究结果作者发现,R&D 专业审计师的客户不太可能通过酌情减少 R&D 支出来参与 REM。这项研究表明,审计师的专业知识有助于加强对客户实际决策的监督,从而为审计师在特定类型交易中的知识获取和转移提供了借鉴。此外,本研究还将研究与开发确定为审计师专业化的一个独特领域。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
5.40
自引率
13.80%
发文量
45
期刊介绍: The key areas addressed are: ■Audit and Assurance (financial and non-financial) ■Financial and Managerial Reporting ■Governance, controls, risks and ethics ■Organizational issues including firm cultures, performance and development In addition, the evaluation of changes occurring in the auditing profession, as well as the broader fields of accounting and assurance, are also explored. Debates concerning organizational performance and professional competence are also covered.
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