The governance role of R&D specialist auditors: Evidence from discretionary R&D expenditure

What is it about?

This study examines whether clients of R&D specialist auditors are less likely to engage in earnings management through a discretionary reduction of R&D expenditure. The study provides evidence of the governance role played by R&D specialist auditors in the client’s real economic decisions and identifies R&D as a distinct source of auditor specialization.

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