The Corporate Innovation Activities And Auditor Risk Response

Under the background of global innovation,Xi Jinping,General Secretary of the Communist Party of China has proposed to promote innovation,and supports the construction of The Science and Innovation Board and the Chinese science and technology innovation center,and Premier Li Keqiang has advocated "mass entrepreneurship and innovation".Driven by multiple national policies,R&D expenditure of chinese enterprises has reached 60.08 billion yuan in 2018,increasing 34.4% and leading the global growth rate.Under the trend of rapid growth,the innovation activities of enterprises attract the attention of the government relevant departments.In November 2018,the CICPA formulated The Special Guidelines for the Identification of High-Tech Enterprises,requiring auditors to conduct independent special auditing of enterprises' research and development expenses and other information.Based on this background,this paper is to study how auditors deal with the innovation activities.Firstly,on the basis of literature review and theoretical analysis,this paper collects relevant data of China's A-share non-financial listed companies from 2007 to 2018 from CSMAR database and DIBO database,and obtains 14,958 valid observations.The results of the behavior of auditor risk response show that the kinds?amounts and capitalized R&D expenditures have significantly increased the audit fees.When Only facing capitalized R&D expenditures,audits are more likely to issue unqualified opinions.What's more,we explore the attitude of auditor risk response by analyzing whether auditors raise audit fees and tend to issue unqualified audit opinions in a positive way or in a preservative way.By exploring the relationship between the enterprise innovation activities and the time lag of audit reports,we find that the auditor can't improve the degree of audit effort.At the same time,innovation activities have no effect on reducing the possibility of financial report restatement,audit quality has not been improved,so that auditors on the whole don't take a positive measure.Secondly,this paper further studies the correlation between enterprise innovation and audit fees in combination with the characteristics of enterprises?the relationship between auditors and enterprises and the external law environment.The results show that the characteristics such as higher risk bearing capacity and information transparency have significantly reduced the positive effects between innovation activities and audit fees.Compared with the enterprises with higher degree of importance of the firm and the enterprises that "marry down"(the potential customers of The Big Four choose the non-Big Four),the bargaining power of the auditors has been significantly weakened,and the strict external legal environment has significantly strengthen the positive correlation between innovation activities and audit fees.At the same time,the study on the relationship between enterprise innovation activities and audit opinions find that the economic complexity of innovation activities have no effect on the types of opinions issued by auditors,when facing the higher the activities of higher accounting complexity,auditors are more likely to issue unqualified opinions,especially the Big Four.In addition,a series of robustness tests are conducted in this paper to exclude the information transmission hypothesis and endogenous problems,and substitution variables are adopted.The above tests all support the conclusions of this paper.Finally,this paper provides relevant suggestions for the system formulation and audit supervision of relevant departments,and verifies the necessity and correctness of the decision of innovative information special audit made by China notes association.