비상장기업에 대한 외부감사가 재량적 발생액에 미치는 효과

다국어 초록 (Multilingual Abstract)

This paper examines the effect of external audit on accounting transparency using private firms. We use discretionary accruals as the proxy of accounting transparency. We further investigate a differential effect of external audit depending on auditor type. Although the effect of external audit has been investigated in many previous papers, most articles has focused on listed companies or initial external audit for private firms. The previous papers which examine the effect of external audit for private firms mainly examine the relation between external audit and interest rates on their debt and the relation between external audit and earnings management. The previous papers that examine the relation between external audit and interest rates on their debt find that private companies with audits pay significantly lower interest rates on their debt than private companies with noaudit. The previous papers which examine the relation between external audit and earnings management has focused on initial audit. The previous papers on initial external audit for private firms proposed mixed results. In this paper, we examine the effect of external audit forprivate firms by comparing discretionary accruals between firms with audited by externalauditors and firms with no audit. The Korean environment provides a useful setting in which to examine the effect of an externalaudit. In Korea, the no-audit base case is available for private firms. The private Korean companies with total assets of less than 10 billion Korean won are not required to have their financial statements audited by independent auditors. As a result, we observe two distinct groups of private firms: firms with no audit and firms with audited by auditors. Using this unique setting, we aim to provide systematic evidence on the effect of an external audit per sein earnings management. Using 55,703 firm-year observations (3,348 firm-year observations with no audit and 52,355firm-year observations with audit) from 1999 and 2007 in private firms with audited byexternal auditors and firms with no audit, we test the effect of external audit. We measure two proxies for audit quality: discretionary accruals measures using Dechow et al. (1995) (modified Jones’ Model, no-performance-matched discretionary accruals) and performance-matched discretionary accruals in Kothari et al. (2005). The results of this paper are following. First, when we use the two proxies of audit quality, controlling for other factors, discretionary accruals of firms with no audit is higher than that offirms with audited by external auditors. These results are still hold even after appling Neweyand West (1987) test and Clustering test and this suggests that our results are robust. Thisfinding suggests that on average, firms that receive a external audit for private firms experience little earnings managements. This implies that there is the effect of external audit for private firms. Second, when we test the effect of auditor type, controlling for other factors, regardless of auditor type discretionary accruals of firms with no audit is higher than that of firms with audited by external auditors. This implies that the main factor of audit effect for private firmsis not auditor type but audit per se. Auditor type consists of Big 4 auditor, non-Big 4 auditor and a group of practitioners. A group of practitioners is comprised of more than 3 CPAs for providing audit services in accordance with the Act on External Audit of Stock Companies. A group of practitioners can audit KOSDAQ firms and private firms but can’t audit KOSPI firms. So, when we examine the effect of external audit for private firms, considering auditor type is interesting. We contribute to the literature in several other ways. Until now, there aren’t researches testingaudit effect on non-listed companies. Previous papers examine the effect of initial externalaudit on the earnings management using private firms. But this paper examines the effect of

참고문헌 (Reference)

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