Effects of Service Innovation on Financial Performance of Small Audit Firms in Taiwan

This study examines the effects of service innovation on financial performance of proprietorship audit firms in Taiwan. This study divides total sample into three business strategy categories, including conventional, non-conventional, and general firms. Non-conventional firms have the highest degree of service innovation followed by general firms. Conventional firms have the lowest degree of service innovation. Empirical results indicate that non-conventional firms financially outperform general firms, and the latter outperforms conventional firms.