• Asia-Pacific Journal of Business
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• v.12 no.3
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• pp.193-212
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• 2021

Purpose - This study investigates the effect of auditor change on client firm's accounting (financial statement) comparability. Design/methodology/approach - The comparability of accounting information is measured by the difference in accruals between the two firms. Additionally, the study uses earnings-stock return relationship as another proxy of accounting comparability. In particular, the paper examines whether there is a systematic difference between initial audit years and the other years with respect to the client firm's accounting comparability. Moreover, current study tests how changes in auditor size or industry expertise before and after the switch of auditors affect the accounting comparability. Findings - The results show that the level of accounting comparability is lower in the year of auditor change than in the other years. Furthermore, this lower level of comparability is derived by the observations that switch their auditors from non-Big4 to non-Big4 or from non-specialist to non-specialist. These results are consistent when accounting comparability is measured by different proxies. Research implications or Originality - The findings of this study provide important policy implications for the regulations related with auditor selection.

• Asia-Pacific Journal of Business
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• v.14 no.3
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• pp.167-186
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• 2023

Purpose - The purpose of this study is to empirically investigate whether the auditor accreditation system for IPO firms improves the efficiency of the KOSDAQ IPO market. To verify the effectiveness of the auditor designation system, we time series compare four measures of IPO firms (earnings management, long-term stock performance, change in operating performance, and possibility of delisting). Design/methodology/approach - We test the hypothesis through event research method and regression analysis. Specifically, the dependent variables of the regression model are discretionary accruals in the year of IPO, 36-month holding period excess return after IPO, change in operating performance for 3 years after IPO, and dummy variable for delisting. And the explanatory variable is a dummy variable that separates the period before and after the implementation of the auditor designation system. Findings - We find that earnings management and delisting risks decreased more in the period after the implementation of the auditor accreditation system than in the previous period. In addition, we find that long-term stock performance and operating performance after IPO increase further after the implementation of the auditor accreditation system. Research implications or Originality - Overall, the results of this study suggest that the implementation of the auditor accreditation system for IPO firms contributes to improving market efficiency in the KOSDAQ market, where information asymmetry is high. Our study differs from previous studies in that it demonstrates the effectiveness of the auditor designation system using various measures.

• The Journal of Economics, Marketing and Management
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• v.3 no.3
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• pp.1-6
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• 2015

Quality auditor and auditors of larger firms have a positive effect on profit is unusual. The auditors smaller negative effect on profit companies profit is unusual. Change to larger audit shows the quality of earnings and to respond more investors positive changes in income and increased costs and reduced profitability is less negative price changes. Similarly, switching to a smaller auditor confirms the low quality of earnings, resulting in a negative response to the market. In this article market reaction (response investors) the quality of the audit and the auditor were studied in the Tehran Stock Exchange. in general, information about companies in capital market accounting to investors and the capital market is considered to be valuable.

• The Journal of Economics, Marketing and Management
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• v.3 no.2
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• pp.1-8
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• 2015

In this paper, the effects of auditor change on audit quality in companies accepted in Tehran stock exchange placed review and we assessed the presence or absence of a significant correlation between them. to assess the quality of data auditing and tax distortions, falsification of accounting estimates, distortion of rules, distortion caused by mistakes in applying accounting policies and other distortions are used as the dependent variable Is. the sample group consisted of 56 companies as experimental group and a control group of 56 other companies a 4-year period, during the years 2011 to 2014 were studied. data needed for research discovery success ratio distortion before and after the change of auditor. To test the research hypotheses paired comparison method is used.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.12 no.20
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• pp.123-138
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• 1989

The primary objective of the agency research in the game theory lives in the maintenance of Pareto is optimal condition for the optimal incentive contract. The basic concepts which are related to this objective are reviewed in connection with the general assumptions to model it, the moral hazard and adverse selection which arised from the information asymmetry, and finally the problem of risk distribution. The demand for auditing and the role of auditor have been addressed by ASOBAC. Issues which an auditor is explicitly introduced in a principal-agent framework have been addressed in this paper. These issues must be confronted to appropriately with the auditor, and to achieve an adequate understanding of optimal confronting arrangement with the auditor. The first step in introducing an auditor into this analysis is to examine the game-theoretic foundation of such a expended agency model. The Mathematical program formulated may not yield solution that are resonable. This arises because the program may call for the auditor and manager to play dominated Nash equilibra in some subgame. The nontrivial natures of the subgame implies that randomized strategies by the auditor and manager nay be of crucial importance. The possibilities for overcoming the randomized strategy problem were suggested; change the rule of the game and or impose covexity condition. The former seems unjustifiable in on auditing context, and the latter promising but difficult to achieve. The discussion ended with an extension of the revelation principle to the owner manager-auditor game, assuming strategies. An examination of the restriction and improvement direction of the basic concept of agency theory was addressed in the later part of this paper. Many important aspects of auditor incentives are inherently multiple-agent, multiple-period, multiple-objectine, phenomena and require further analyses and researches.

• Management & Information Systems Review
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• v.38 no.3
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• pp.35-53
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• 2019

A standing auditor can perform the monitoring and control activities for the opportunistic behaviors of top manager. However, for this purpose she/he must have the independence from top manager. Thus, this study is designed to analyze the factors that influences the independence of standing auditor. The independence of standing auditor as dependent variable was measured in terms of school and company ties to top manager. The relationship between the shareholding of professional top manager and independence of standing auditor, and the moderating effects of the shareholdings of related-party, institutional investors, and foreign investors were examined by implementing multiple regression and conditional moderating effect analyses. The findings present a negative relationship between the shareholding of professional top managers and the independence of standing auditor. They also reveal a positive moderating effect of the shareholding of related-party on that relationship. On the other hand, the shareholdings of foreign and institutional investors did not significant change the relationship between the shareholding of professional top manager and the independence of standing auditor. The findings imply that professional manager might be able to lower the controlling mechanism by appointing a standing auditor having low independence. Related-party as an internal control mechanism might be beneficial to reduce this effect while institutional investors or foreign investors as an external control mechanisms might not. This is the first study that examine the antecedents of the independence of standing auditor in terms of the characteristics of ownership structure. It provides a guideline for selecting an effective standing auditor with the consideration for ownership structure.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.10 no.4
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• pp.877-886
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• 2009

Since 1982, the auditee have selected the auditor under market mechanism. Under the system on which the auditor have been chosen by client, there have been chances for opinion shopping, etc. To prevent those, some audit regulations have been introduced. Prior studies have documented the positive effect of these audit regulations. Those studies, however, had some limitations which they dealt with just short event period for empirical tests. This study examines the effect of Auditor Turnover Ratio on the Quality of Earnings using a sample of firms that were listed on Korea Exchange(KRX) from 1995 to 2004. The firms that change auditor frequently are expected to have low disclosure quality. The CEO with the incentives to manage or manipulate earnings could accomplish this purpose by replacing existing auditor with more friendly auditor, which could result in eventually lowering earning's quality of the firm. The result of empirical test shows that the accrual quality of firms which have high auditor turnover ratio are significantly lower than those of firms which have low ratio. This result is consistent with our hypothesis that the more frequently a firm changes auditor, the lower the quality of earning is. This evidence might give the implication to policy-making supervisor.

• Journal of Convergence for Information Technology
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• v.12 no.4
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• pp.111-118
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• 2022

This study is an analysis of auditor's response to audit risk. Specifically, audit risk is measured by the amount of correction of the current financial statements, and auditor's response is measured by the rate of change of audit hour in next auditing. The amount of correction can be viewed as audit risk recognized by auditor because the degree of auditor's correction will increase as the company's financial statement preparation ability is lower or the profit management amount is larger. Auditor's response is measured as the rate of change of audit hour because audit risk would be incorporated in audit plan. Although auditing is performed by a team, auditor's response would differ depending on their roles. It is expected the leaders who establish the audit plan and manage the audit quality would respond more sensitively to audit risk than the other auditors. The results show that when the amount of correction is greater than a certain level, auditors recognize it as audit risk and increase total(and leaders') audit hour in next year audit.

• Proceedings of the KSPS conference
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• 2002.11a
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• pp.73-76
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• 2002

The purpose of this paper is to research Korean boundary tone of sentence type and perceptive speaker's attitude according to speech rate - three type. In view of the preceding study, Korean intonation's meaning is determined by boundary tone. Also, in my experimental results, Korean boundary tone of sentence type has preferential tone. However, Korean boundary tone of sentence type is not influential according to speech rate. The speech rate's change of three pattern is influential in auditor's perceptual response. The relationship between the pitch contour of boundary tone and speech rate is not significant.

• Journal of Industrial Technology
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• v.29 no.B
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• pp.25-31
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• 2009

The necessity of university's educational change is rising up, along with a social environment that keeps changing. This study deals with a newly educational style by recognizing the necessity of variance for engineering education, according to engineers' diversified roles within a company. The study was conducted by 7 members of middle-sized group, replaced from 5 members of small-sized and each was given his task by his job such as CEO, CMO, CSO, CIO, CCO, CQO or Auditor. On the basis of four theoretical backgrounds, this paper investigated students' level of learning satisfaction shown before and after task undertaking through a questionnaire and appraised the result made before and after task undertaking. This study is expected to improve a teaching method of university engineering education.