감사인 지정의 효과 : 부채비율과다와 소유경영미분리의 사유를 중심으로

Abstract

Auditors' independence is one of the major factors determining audit quality. It has been criticised that auditors' independence is impaired under the current free auditor choosing system. To circumvent this problem, compulsory auditor-designation system has been introduced in 1990. This study was to examine the effect of the compulsory auditor designation system. We selected the firms whose auditors were designated because of high-leverage(79 firms) or owner-manager(87 firms) in the years of 1992-2003, and examined whether those firms manage their earnings before auditor designation and whether the earnings management behavior disappears after auditor-designation. Income management was measured by discretionary accruals using a modified-Jones model. The empirical results of this study show that, before the designation, high-leverage firms increase their earnings and owner-manager firms decrease their earnings as expected, but those income management behaviors disappear after the designated auditors come in. This is same even though the desinated auditors continue to audit those firms for the following 3 years. However, when the auditor-designation was freed, it was observed that about 1/2 of the designated auditors was replaced and discretionary accruals increase substantially in the high-leverage firms whose auditors are replaced. This study contributes in that it examines the appropriateness of the causes(high-leverage and owner-manager) of a compulsory auditor-designation system, and provides a piece of empirical evidences on whether the compulsory auditor-designating system works well and therefore improves the auditor independence.