Do Shared Auditors Facilitate Follow-on Innovation?

• 成果类型: Article; Early Access
• 署名作者: Tian, Xuan; Yan, Jiawen; Zuo, Luo
• 署名单位: Tsinghua University; National University of Singapore
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.70010
• 发表日期: 2025
• 关键词: industry expertise; patent citations; office size; KNOWLEDGE; COMPETITION; FLOWS; universities; mergers; IMPACT; time

摘要

We investigate whether shared auditors promote the dissemination of innovative knowledge among their clients, thereby fostering follow-on innovation. We find that a company cites more patents from another company when they are audited by the same audit office. To address concerns about potential confounding factors stemming from commonalities in the fundamentals of the two companies, we leverage a quasi-exogenous shock to auditor sharing: the demise of Arthur Andersen and the subsequent increase in auditor switching in 2002. Further analysis reveals that the effect of a shared auditor on cross-client patent citations is stronger when both clients engage in intensive innovation activities. Additional evidence suggests that shared auditors exert more influence on the citations of recent patents and patents that are easier for outsiders to utilize. Overall, our findings suggest that auditors affect corporate innovation by facilitating the transfer of innovative knowledge among their clients.