earticle

영어

A fundamental improvement of audit quality has been a important research question for decades. In 2001, high profile accounting scandals such as Enron crisis, rekindled how to protect market participants and restore public confidence. In the U.S., the regulators prepared a legal device, “2002 SOX” to strengthen auditors’ responsibilities to improve audit quality. In South Korea, many regulations have also been introduced such as 3 year auditor retention regime, 3 year audit partner rotation regime, 6 year mandatory audit firm rotation regime etc, in a bid to improve audit quality. However, those regulations have only a marginal effect since high profile accounting scandals such as the SK global crisis, the savings bank crisis and the recent Moneual crisis, repeatedly occurred, suggesting that a fundamental means to improve audit quality is urgent. Since the 3 year auditor retention regime which was originally introduced to protect auditor independence, instigated high audit engagement competition, audit fee started to decrease on average. Furthermore, the 6 year mandatory audit firm rotation rule which was introduced with a purpose of preventing a corrupt relationship, led to dumping audit fees. An audit fee is fixed in advance at an audit engagement whereas audit hours are subsequently determined based on the risk that auditors believe. Given a low audit fee fixed at the beginning of the year, auditors may have less incentives to increase audit hours unless significant audit risks are captured. Rather they may have high incentives to have as many contracts as possible to replenish shortage of their income. Since those auditors may need to audit a high number of client firms, they need to cut the work short for one client and move to a next client firm promptly, which basically creates poor quality of audit after all. In order for a fundamentally increase in audit quality, optimal audit fees should be maintained, NOT introduction of experimental regulations. According to previous literatures, higher audit fees have a positive association with higher audit hours(Park and Park, 2007), suggesting that auditors who are guaranteed with a s표 income, would increase audit hours for close scrutiny. Other previous studies find that increased audit hours lead to increased audit quality(Dye, 1993; Hillegeist, 1999), suggesting that audit hour is a key aspect to improve audit quality given auditors are independent. Though number of studies have investigated the relationship between audit fees, audit hour and audit quality, not many of them did Big4 and Non-Big4 partitioning. Despite audit fees and audit hours are determined by various factors, there may be a systematic difference in audit hours, fees and incentives between Big4 and Non-Big4, thus this study separately analyzes those two groups. This study uses a panel data of 285 firms for 11 years, examining static and dynamic panel data analysis of the effect of 1) audit fee on audit hours and 2) audit hours on audit quality using separate two groups: Big4 and Non-Big4. This was done to ensure whether audit fee↑→ audit hours↑→ audit quality↑ flow is a true. The empirical results are summarized as follow. First, audit fees have significantly strong association with audit hours, suggesting auditors with higher audit fees would spend more hours to audit client firms. Despite this is true, neither audit fee per hour or audit hour per fee have significant association with audit hours. This may be because audit fees are predetermined at the beginning of a year whereas audit hours are subsequently determined after an audit. Both audit hours per fee and audit fees per hour are mechanically determined since they are denominator and numerator. Since audit hourly rate is not set at the beginning, auditors have no incentives to increase audit hours. Second, audit hours have positive association with audit quality for Non-Big4 group(and full sample) only. Other additional analysis and robust tests consistently support the main results. Insignificant association between audit hours and audit quality for Big4 may be attributed to cutthroat competition. Since Big4 audit firms are highly involved in keen competition compared to Non-Big4 firms, increased audit hours may mean detection of potential audit risk, not thorough audit. Big4 firms have higher incentives to fulfil shortage of lowered income thus minimum of audit hours may be spent. This study uses a trustworthy panel data to examine whether audit fee drives audit hours and subsequently audit hours influence audit quality using separate group partitions. Our results may be of interest to regulators, investors, and other market participants who concern about the relation between audit fees, audit hours and audit quality, separately in Big4 and Non-Big4 audit firms.

한국어

본 연구는 감사법인간의 과당경쟁으로 인하여 감사보수가 정상적으로 증가하지 못하는 우리나라 환경의 문제점을 고찰하기 위하여 285개 기업의 11년간 패널데이터를 이용하여 감사보수, 시간 및 품질의 관련성을 분석하였다. 연구결과를 요약하면 다음과 같다. 첫째, 감사보수는 선행연구와 일관되게 감사시간에 유의한 영향을 미치는 것으로 나타났으나 시간당 감사보수와 감사보수당 투입시간은 감사노력과 관련성이 없는 것으로 나타났다. 이는 보수를 많이 받는 감사인이 더 많은 감사노력을 투입한다는 직관과는 일관되지만 감사보수가 총액으로 사전 결정되고 투입시간이 사후 결정되는 우리나라 환경에서는 시간당 감사보수와 감사보수당 투입시간이 절대감사투입시간 증가를 견인하지 못하는 것을 의미한다. 둘째, 감사시간은 Non-Big4 표본에서만 감사품질과 유의한 양(+)의 관련성을 갖는 것으로 나타났다. 아울러 모든 강건성 분석 및 추가분석에서도 결과가 질적으로 상이하지 않았다. Big4 표본에서 감사시간과 감사품질의 유의한 관련성이 관찰되지 않은 이유는 감사보수 과당경쟁으로 말미암아 철저한 표본검사가 이루어 질 수 없는 환경문제에 기인한 것으로 해석할 수 있다. 저가수주 경쟁으로 인하여 감사보수총액이 기대수준 보다 낮게 고정되면 감사법인 입장에서는 매출을 유지 혹은 증대시키기 위하여 보다 많은 계약을 체결할 유인이 생길 수 있다. 따라서 이러한 환경에서는 절대감사투입 시간이 감소할 수밖에 없으며 이는 감사품질의 저하로 연결될 수 있다. Big4 법인이 사전 결정된 감사보수 하에서 감사시간을 증가시킨다면 이는 감사인이 위험을 인지하고 잠재적 소송위험회피를 위한 최소 시간투입 증가로 해석할 수 있는데 이는 근본적으로 감사품질을 향상시킬 수 없음을 의미한다.