A Periodic Auditor Designation and the Role of Audit Committee
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Purpose: The purpose of this study is to review the new regulations on the periodic auditor designation system and to investigate the role of the Audit Committee in implementing the periodic auditor designation system. Design/methodology/approach: To achieve the objectives of this study, this study examines the revisions of the External Audit Law that stipulates the periodic auditor designation system. This study examines the expected positive and negative effects of the periodic auditor designation. This study suggests the role of the Audit Committee for the successful implementation of the periodic auditor designation system. Findings: The findings of this study are as follows. First, the periodic auditor designation system improves the independence of external auditors, improves the quality of accounting audits, and improves the reliability of financial information. Second, the Audit Committee's authority has been strengthened regarding the appointment of external auditors, including audit fees, audit hours, and compliance with audit contracts. The Audit Committee should communicate sufficiently with the external auditor and should fully monitor the audit process of external auditors. Third, improving the independence of external auditors, improving the quality of accounting audits, and improving the reliability of financial information has the effect of converting the supervisor's supervisory competency from post-detection supervision to preventive supervision. Research limitations/implications: The results of this study provide practical implications for the role of corporate governance by emphasizing the role of the Audit Committee. Originality/value: Korea is the first country in the world to apply the periodic auditor designation system. This study is worthwhile as the first paper to introduce the expected effects of the application of the periodic auditor designation system.
Abstract
Purpose: The purpose of this study is to review the new regulations on the periodic auditor designation system and to investigate the role of the Audit Committee in implementing the periodic auditor designation system. Design/methodology/approach: To achieve the objectives of this study, this study examines the revisions of the External Audit Law that stipulates the periodic auditor designation system. This study examines the expected positive and negative effects of the periodic auditor designation. This study suggests the role of the Audit Committee for the successful implementation of the periodic auditor designation system. Findings: The findings of this study are as follows. First, the periodic auditor designation system improves the independence of external auditors, improves the quality of accounting audits, and improves the reliability of financial information. Second, the Audit Committee's authority has been strengthened regarding the appointment of external auditors, including audit fees, audit hours, and compliance with audit contracts. The Audit Committee should communicate sufficiently with the external auditor and should fully monitor the audit process of external auditors. Third, improving the independence of external auditors, improving the quality of accounting audits, and improving the reliability of financial information has the effect of converting the supervisor's supervisory competency from post-detection supervision to preventive supervision. Research limitations/implications: The results of this study provide practical implications for the role of corporate governance by emphasizing the role of the Audit Committee. Originality/value: Korea is the first country in the world to apply the periodic auditor designation system. This study is worthwhile as the first paper to introduce the expected effects of the application of the periodic auditor designation system.
참고문헌 (17)
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