감사인의 기말 재고자산 실사입회의 효과에 대한 실증연구

Abstract

This study investigates whether the number of due diligence about inventories on the external audit implementation details recorded since 2014 has information effect to restrain earnings management. Earnings management using inventories is based on a measure derived from real earnings management related abnormal inventories change introduced on Roychowdhury(2006) and earnings management using allowance for overvaluation of inventories introduced on Guidry et al.(1999). By using Korean firms listed on KOSPI from 2014 to 2017, this study analyses the effect of due diligence about inventories on earnings management using inventories and verifies the impact of the attendance inspection on the suppression of earnings management using regression analysis.
 Followings are the findings of this study. First, the number of due diligence about inventories is negatively correlated with real earnings management related abnormal inventories change, a proxy for earnings management using inventories. Second, the effect of restraining earnings management in the number of the attendance inspection shows that it serves as an audit quality when the number is more than three days compared to less than three days.
 The contribution of this study is as follow. This study finds a significant relationship between due diligence about inventories on the external audit implementation details and audit quality that restrains earnings management using inventories. This study os contributing to the expansion of research on earnings management by presenting empirical evidence of the impact of external auditing disclosure on earnings management as a proxy the quality of accounting information. Moreover, the number of the attendance inspection is effective as a proxy for audit quality, indicating that such detailed disclosure has an institutional effecting on improving audit quality. Therefore, it seems to be meaningful that this study has policy implications by providing a basis for judgment of decision making and policy making related to the disclosure of the external audit implementation details.