감사인 품질관리감리의 효과성에 관한 연구 : 한국공인회계사회의 품질관리감리를 중심으로

Abstract

Following a series of accounting scandals, such as Enron and Worldcom, there has been a world-wide movement to reform the statutory supervisory system for the audit firms. Correspondingly, in Korea, the regulators have adopted Quality Control Review (QCR) program for the audit firms in 2007 in order to strengthen the accounting transparency. Recently, the gradual induction of the International Financial Reporting Standards (IFRS) and the International Standard on Auditing (New ISA) has radically changed the accounting environment. In response to this environmental change, several prior studies argue that the statutory inspection of audit firms has to place more weight on QCR which is characterized by ex-ante approach for ruling the auditors (Lim et al 2009; Jung et al 2009; Kwon et al 2010). Despite the importance of QCR, however, it has not been documented whether the QCR is an effective mechanism to evaluate the auditors' audit quality. We empirically examine the effectiveness of QCR that is performed by KICPA. Specifically, we investigate whether the audit quality of accounting firms is properly evaluated by QCR. Also, we examine the effectiveness of the QCR in improving the audit quality of audit firms. To conduct our test, we collect KICPA's QCR scores for the 30 small and middle size audit firms during 2007-2008. Then, we partitioned the audit firms into 2 groups based on the QCR scores: that is, high quality (HQ) groups and low quality (LQ) groups. Also, to proxy the audit quality, we use performance matched discretionary accruals (PMDA) which is suggested by Kothari et al. (2005), accruals quality (AQ) which is suggested by Dechow and Dichev (2002) and McNichols (2002), and degree of conservatism (DC) which is suggested by Ball and Shivakumar (2005). Our results are given as follows. First, we find that the audit quality of HQ group is significantly higher than that of LQ group. This result demonstrates that the QCR is an effective mechanism in identifying the audit quality of audit firms. Second, separating the QCR scores into Quality Management System Review (QMSR) scores and Individual Audit Engagement Review (IAER) scores, we show that while QMSR is effective in evaluating the audit quality of audit firms, IAER is not. This finding implies that the audit quality of audit firms is determined by the overall quality management system rather than by individual audit engagement Third, comparing the audit quality of small and middle size audit firms to the audit quality of Big 4, we find that the audit quality of Big 4 is slightly higher than that of small and middle size audit firms. However, we show that the small and middle size audit firms whose QCR scores are high have the audit quality which is comparable to the audit quality of Big 4. This finding provides an important implication that even the small and middle size audit firms can have the superior audit quality when they maintain a desirable quality control system. Lastly, we show that the QCR is insufficient to improve the audit quality due to the weakness in follow-up steps. This result stresses that the follow-up actions of QCR have to be reinforced in the direction of virtually improving the audit quality. This study is subject to following limitations. First, this paper covers relatively short period due to the recent enforcement of QCR. Second, our sample size is relatively small. Despite this weakness, our research is the first one which explores the effectiveness of QCR in Korea. We demonstrate that the QCR can be an effective mechanism to evaluate the audit quality of audit firms. Moreover, we suggest that in oder to improve the audit quality, the implementations of follow-up actions of QCR have to be strengthened. We expect that our research might provide the useful implications to the regulators.