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- Title
Corporate Innovation and Audit Fees.
- Authors
Sung-Jin Park; Seung Won Lee; Byungwhan Lee, Brandon; Hyung Tae Kim
- Abstract
We investigate the extent to which a client's innovative effort affects the level of audit effort and whether the innovative-effort efficiency can attenuate the demand for greater audit effort associated with a client's risky research-and-development (R&D) investments. We find that a client firm's strategic emphasis on corporate innovations may require more significant audit effort, while the efficiency of the firm's innovation can attenuate the demand for heightened external auditor's audit effort related to the firm's risky and innovative activities. Findings suggest that the external auditor does not always discourage corporate innovation as the efficiency of a firm's innovation may lower the client business risk perceived by an auditor.
- Subjects
RESEARCH &; development; AUDITORS; STRATEGIC planning; MARKET volatility; RISK management in business; RISK assessment
- Publication
Pan-Pacific Journal of Business Research, 2021, Vol 12, Issue 2, p1
- ISSN
2155-8442
- Publication type
Article