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http://dx.doi.org/10.15207/JKCS.2022.13.04.321

The Effect of Business Strategy on Audit Hours  

Lee, Yu-Sun (Department of Accounting, Soongsil University)
Do, Kee-Chul (Department of Accounting, Soongsil University)
Kim, Min-Hee (Department of Accounting, Soongsil University)
Publication Information
Journal of the Korea Convergence Society / v.13, no.4, 2022 , pp. 321-329 More about this Journal
Abstract
This study analyzes how companies of prospector type with inherent risks from new products and R&D costs affect audit hours, and further analyzes how they affect rank-specific audit hours. Samples were empirically analyzed using samples from 2018 to 2019 for KOSPI-listed and KOSDAQ-listed companies. As a result of the analysis, first, it was found that auditors were aware of the inherent risks of companies of prospector type and were striving to improve audit quality. Second, it was found that the corresponding degree of risk differs depending on the position and role in the audit team, so higher efforts were made in core positions with high risk levels. The results of this study are meaningful in verifying how the type of Business Strategies affects the audit efforts and resource input of auditors who are external parties, not internal factors such as financial reporting quality or tax avoidance. It also has important implications that a company's Business Strategies can be an significant factor to consider in preparing policies and systems for improving audit quality.
Keywords
Business Strategy; Prospector; Defender; Audit Hours; Rank-Specific Audit Hours; Audit Risk;
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Times Cited By KSCI : 1  (Citation Analysis)
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