Topic: National Auditor Inspection Programs and Corporate Innovation: International Evidence
Speaker: HUANG Yuan, Associate Professor, School of Accounting and Finance, Hong Kong Polytechnic University
Host: ZHONG Yuxiang, Lecturer, Department of Accounting, School of Management of HUST
Time and Date: 10:00a.m.-11:30a.m., Dec. 10, 2021 (Friday)
Platform: Tencent Meeting ID: 158 801 208
This paper examines the real effects of national auditor inspection programs on corporate innovation. Exploiting the staggered adoption of auditor inspection programs worldwide and employing a difference-in-differences methodology, we find that patents and patent citations increase significantly following the introduction of auditor inspections. This finding suggests that increased auditor oversight has a positive impact on corporate innovation activities. Moreover, we find evidence consistent with inspection programs promoting innovation activities by relaxing firms’ financial constraints, mitigating management myopia in firms where agency conflicts between managers and shareholders are more severe, and encouraging CEO risk-taking. Additional analyses show that after the adoption of auditor inspection programs, firms undertake more risky innovation activities that involve path-breaking patents, which have a more positive contribution to firm value. Collectively, our study provides evidence on how auditor oversight affects corporate innovation outcomes worldwide.
Speaker’s Profile:
Dr. Yuan HUANG is an Associate Professor of Accounting at the Hong Kong Polytechnic University. She obtained her Ph.D. in Accounting from Hong Kong University of Science and Technology. Her research interests include accounting- based equity valuation and the effect of financial reporting practices on corporate financial management decisions. Her research has appeared in the Journal of Financial and Quantitative Analysis, Journal of Accounting and Public Policy, and Journal of Accounting, Auditing and Finance.
