Research and Development Intensity and Audit Fees

Authors : Zenghui Liu, Bo Ouyang

Pages : 328-340

View : 13 | Download : 7

Publication Date : 2014-09-01

Article Type : Other

Abstract :This study provides evidence on whether audit fees vary in response to the intensity of research and development (R&D) expenditure and whether some other factors, such as expert auditor, may moderate the relationship between R&D intensity and audit fees. Our evidence indicates that there is a positive relationship between R&D intensity and audit fees and hiring an industry specialist auditor may attenuate the relationship. Our findings sugge*st that auditors charge a premium for heightened audit risk and increased audit efforts related to R&D intensity.
Keywords : Audit fees, Research and development intensity, Auidit specialist.