The impact of industry technology complexity on audit quality

Jianmin Liu and Qin Xia

Technology in Society, 2024, vol. 79, issue C

Abstract: With the continuous upgrading of Chinese industries, industry technology complexity has increased dramatically, to which audited units and audit subjects have adaptive responses, affecting audit quality. However, relevant studies have not been conducted. This paper takes A-share listed companies from 2007 to 2021 as a sample to investigate the impact of industrial technology complexity on audit quality and its mechanism. It is found that industry technology complexity can significantly enhance audit quality; in enterprises at the front-end of industrial technology, industry technology complexity has a more significant role in promoting audit quality. Adopting the demonstration zone for the transfer and transformation of scientific and technological achievements as an exogenous impact policy, the study finds that the impact of industry technology complexity on audit quality still holds. Further research finds that the adaptation of audited units and audit subjects to industry technology complexity has a positive incentive effect on audit quality. The findings extend the audit consequences of industrial technology complexity and provide empirical evidence for the role of industrial technology complexity in enhancing audit quality.

Keywords: Industry technology complexity; Audit quality; Exogenous policy shocks; Adaptability test (search for similar items in EconPapers)
JEL-codes: M41 M42 O12 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:teinso:v:79:y:2024:i:c:s0160791x24002859

DOI: 10.1016/j.techsoc.2024.102737

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