Industry-expert auditors and R&D Capitalization

• Main Authors: Jia-LungWu, 吳佳龍
• Other Authors: Chaur-Shiuh Young
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/33560421128962126035

碩士 === 國立成功大學 === 會計學系碩博士班 === 101 === Prior studies on the relationship between audit quality and R＆D capitalization do not consider the role of auditor industry specialization, while another stream of research on the value relevance of capitalized R＆D does not consider the importance of industry expert. By integrating the two streams of research, this paper investigates the relationships among auditor industry specialization, capitalized R＆D and the value relevance of capitalized R＆D. Using a sample of U.S. listed software companies over the period of 2007-2011, this study finds that firms audited by industry expert have less percentage of R＆D spending being capitalized. Furthermore, I also find that the value relevance of capitalized R＆D is enhanced by auditor industry specialization, indicating that investors perceive the quality of R＆D reporting to be higher when the firm is audited by industry-expert auditors.