Supply chain diffusion mechanisms for AI applications: A perspective on audit pricing

Jiaxin Wang, Mu Zhao, Xiang Huang, Zilong Song and Di Sun

International Review of Financial Analysis, 2024, vol. 93, issue C

Abstract: Artificial intelligence (AI) application has had a profound impact on business development. However, it is not clear whether supplier AI application has an impact on customers and its mechanisms. In this paper, we empirically examine the impact of supplier AI applications on customer audit fees using robotics data from the International Federation of Robotics (IFR) as a proxy variable for the level of AI. We find that supplier AI applications significantly reduce firms' audit fees. Further mechanism tests indicate that supply chain risk and supply chain transparency are two potential mechanisms. In addition, the stronger the supplier's diffusion capability, and the stronger the client's absorptive capacity, the more pronounced the above spillover effects. This paper emphasizes the important impact of supply chain relationships on third-party auditors' pricing decisions.

Keywords: Supply chain; Artificial intelligence; Audit pricing (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521924000450
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:93:y:2024:i:c:s1057521924000450

DOI: 10.1016/j.irfa.2024.103113

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().