동일 감사인 6년 강제교체제도는 실패한 제도인가? : 강제교체 직전연도의 감사품질을 중심으로

초록

On September 21, 2017, the Political Affairs Committee of the National Assembly agreed to revise the Act that a listed company, which has been audited by the same audit firm for six consecutive years, should change mandatorily the auditor. According to the Act, the new audit firms will be chosen by the Securities and Futures Commission rather than by the firms. However, as the mandatory auditor rotation was adopted in the past but it was abolished soon, there is no clear conclusion regarding the positive effects of the mandatory changes. Therefore the reintroduction of the mandatory auditor rotation regime can be a controversial issue. The study aims to review the appropriateness of reintroduction for the mandatory auditor rotation regime through analyzing the effects of that system, which was temporarily adopted in 2006. In particular, this study focuses on audit quality in the year preceding the mandatory changes, comparing to the prior research that focuses on audit quality after replacement. Under the mandatory auditor rotation regime enforced in 2006, companies could choose the new audit firms, so that they might tend to provide lower audit quality thanks to adverse effects such as the low audit fee according to the excessive competition between auditors. On the other hand, the auditors who are supposed to be forced to replace should bear the consequences such as the enforcement action of the Financial Services Commission and defamation if the problems occur after their replacement. Thus we expect that the auditors will have the incentive to provide a higher level of audit service on the verge of the change. For the purpose of this study, we first investigate whether mandatory audit firm rotation affects discretionary accruals and performance-matched discretionary accruals as a proxy for audit quality using the sample that is composed of compulsorily rotated audit firms only. Also we examine whether the relationship between mandatory auditor rotation and audit quality is a general phenomenon occurring prior to the replacement of audit firms. For the second purpose, voluntarily changed audit firms are used as matched sample. The results in total sample (2006 to 2010) show that research hypotheses are supported partially. Also, statistical significance is being larger in the results using a sub-sample (2006 to 2008), it means that the effectiveness of that system is dampened since 2009 when the abolition of mandatory auditor rotation regime was decided. In addition, the results illustrate that the effectiveness of mandatory auditor rotation regime is more likely to be detected in using absolute discretionary accruals (or absolute performance-matched discretionary accruals) instead of raw data. In summary, these results are partially consistent with our expectation that the auditors who are aware of the timing of change in advance will perform a stricter audit service just prior to being forced to replace, and that mandatory auditor rotation regime temporarily enforced in 2006 has an effect on improving prior audit quality by limiting the continuing audit period. The main contribution of this study is that, although limited evidence, we provide the empirical evidence which the mandatory auditor rotation regime may have a positive effect on audit quality. Especially, the results of this study are timely and important in that the mandatory auditor rotation regime will be reintroduced in the near future.

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