دانلود رایگان مقاله انگلیسی دارایی های نامشهود در ترازنامه و هزینه های حسابرسی - اشپرینگر 2017

Abstract

This study empirically examines how auditors view intangible assets that are recorded on the balance sheet. Intangible assets have been rising on corporate balance sheets and are growing in importance. In contrast to tangible assets, intangible assets pose unique challenges to auditors in terms judgment and complexity. The study uses a sample of COMPUSTAT firms over the period 2010-2015. The results show that auditors charge higher fees for firms with higher proportion of intangible assets on the balance. This result holds for all intangible assets, goodwill type intangible assets, and intangible assets other than goodwill. For firms with high book to market ratios these results are stronger indicating that potential impairment concerns lead auditors to charge even higher fees for such firms. A variety of sensitivity tests are conducted to verify the robustness of the results. These results are of interest to investors, regulators, firm managers, corporate boards, and auditors.

Summary

The growth of intangibles as a proportion of total assets on the balance sheet has been increasing in the recent years. A growing literature addresses how investors, analysts, and regulators respond to intangible assets on the balance sheet. This study contributes to this literature by examining how external auditors view intangible assets on the balance sheet. The results indicate that auditors charge higher fees for firms with higher proportion of intangible assets that are on the balance sheet, suggesting that auditors view these as potential audit risks and thus requiring more effort. This result applies to both goodwill and other types of intangibles. The association between audit fees and intangibles is more pronounced for firms with high book to market ratios indicating that auditors view intangible assets for such firms to be riskier, possibly because of potential overstatement of values. Finally, the results are robust to instances of asset impairments. These results are of interest to investors, regulators such as the PCAOB, firm managers, corporate boards and auditors. Firm managers and investors would be interested in reducing the costs of audit and may consider necessary disclosures that could mitigate the higher audit cost. Both accounting regulators and auditing regulators, while deliberating on accounting rules for recognition of intangibles may take into consideration whether the revisions would provide more assurance about the valuations and thus lead to lower audit fees. From a governance perspective, board of directors are likely concerned about high audit fees and whether they are an indication of underlying problems in reporting. Future research can extend these results by looking at whether firms can minimize the higher audit costs by providing appropriate disclosures that signal private information to the auditors and thereby mitigate the valuation concerns.