회계제도 개혁이 자본시장에 미치는 영향: 감사인 지정의 효과를 중심으로

Abstract

The purpose of this study is to examine the capital market consequences of External Audit Act amendment in 2017. We first examine how Korean audit market changes following the External Audit Act amendment by investigating the changes in audit fees and market share of Big 4 auditors. We find that audit fees in Korean audit market significantly increase following the External Audit Act amendment, relative to those in U.S. and Japanese audit markets. We further find that the market share of Big 4 auditors in Korean audit market slightly decreases after the amendment. These results suggest some evidence that the External Audit Act amendment affects the structure of Korean audit market. We then examine the effects of auditor designation on both audit and capital markets, by investigating audit fees, accounting quality, cost of capital, liquidity, and foreign ownership. We classify the auditor designation into precautionary designation and revisionary designation based on the reasons for the designation. We find that the precautionary designation has positive consequences as evidenced by changes in liquidity, foreign ownership, and discretionary accruals and the cost of debt. By contrast, the revisionary designation has negative impacts, as shown by changes in discretionary accruals, the cost of debt, and credit ratings. These results suggest that the precautionary designation has certification effects, while the revisionary designation results in disciplinary effects. More importantly, we investigate the effect of the periodic auditor designation system by using difference-in-differences methodology. The result suggests that audit fees and audit hours increase for the firms that are subject to periodic designation after the designation relative to the firms that are not. However, we do not find the differential impact on discretionary accruals. In addition, we conduct a survey to the interested parties, including accounting information users, equity analysts, credit analysts, and external auditors, to examine the market participants’ assessments on the amendment of External Audit Act. The survey results show that the majority of the respondents positively assess the capital market consequences of External Audit Act amendment. Moreover, positive responses are more salient for credit analysts, who tend to focus more on the downside risk relative to upside opportunity. Overall, our findings suggest that External Audit Act amendment has positive capital market consequences in some aspects.