Corporate R&D Investment And Audit Fees

In today’s society,the development of science and technology is increasing day by day,the market competition is gradually fierce,and the attention of various countries and regions to research and development innovation is also increasing.In the report,General Secretary Xi Jinping proposed to accelerate the construction of an innovative country,and proposed that innovation is the primary force for promoting social development and an important strategic support for the realization of a modern economic system.Innovation as an important business strategy,with high uncertainty,low success rate,long cycle and other characteristics,although it can bring core competitiveness and long-term benefits to enterprises,but will also bring higher risks to enterprises,affect the stability of enterprise returns,which will induce management to manipulate surpluses,at the same time,the limitations of R&D expenditure related standards also provide room for management to manipulate surpluses.As a result,innovation not only creates value for the business,but also creates risk for it,and provides room to manipulate surpluses.Modern risk-oriented auditing circumvents the limitations of traditional auditing methods,requiring auditors to focus on the high-risk areas of the audited unit and consider the audited unit’s business strategy as a whole.As a paid service,the auditor formulates a charging standard after considering the audit risk and cost in a balanced manner.As a major business strategy of enterprise innovation,the economic consequences of heterogeneity brought about by R&D activities will affect the audit risks faced by auditors and audit strategies,which in turn affect the audit fees formulated by auditors.The most direct expression of innovation activities is R&D investment,so it is of great practical significance to explore the relationship between R&D investment and audit fees of enterprises and the impact path between the two.In summary,this thesis takes China’s A-share listed companies as the research object,uses the data from 2012 to 2020 to construct an empirical model,empirically examines the correlation between enterprise R&D investment and audit fees,and uses the operating risk and surplus management level of enterprises as intermediary variables to test the transmission mechanism of enterprise R&D investment to audit fees,and finally incorporates the company’s property rights characteristics and government R&D subsidies into the research framework,and examines in groups how the relationship between enterprise R&D investment and audit fees differs under different scenarios.Finally,the research results show that in China’s A-share listed companies,the R&D investment of enterprises will increase the operating risk and surplus management degree of enterprises,increase the cost of audit risks and auditor inputs,and then increase audit fees,while in non-state-owned enterprises and enterprises with low government R&D subsidies,the impact of R&D investment on audit fees is more significant.The innovation points in this thesis are divided into the following three points:First,the economic consequences of R&D investment and the influencing factors of audit fees are enriched.Second,the mechanism of the impact of R&D investment on audit fees is explored.Third,the heterogeneity of R&D investment on audit fees in different contexts is analyzed.