R&D capitalization and audit fees: Evidence from China

Jia Chi Cheng, Chia Chi Lu, Nan Ting Kuo

研究成果: 雜誌貢獻期刊論文同行評審

16 引文 斯高帕斯(Scopus)


Our study investigates the association between capitalized R&D costs and audit fees and whether this association reflects the effect of earnings management. By exploring Chinese listed firms, we find that capitalized R&D costs are positively associated with audit fees, where such positive association holds for both the discretionary and nondiscretionary portions of capitalized R&D costs. Moreover, the positive association between the discretionary portion of capitalized R&D costs and audit fees is more pronounced for firms with stronger incentives to manipulate earnings. Overall, our findings imply that firms’ reporting incentives affect how auditors react to clients’ accounting choices. This in turn suggests that auditors believe some firms capitalize R&D to manipulate earnings, and the resulting earnings-management concerns lead them to charge higher fees.

頁(從 - 到)39-48
期刊Advances in Accounting
出版狀態已出版 - 1 12月 2016


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