지분법 회계가 감사보고시차에 미치는 영향

When a firm controls or has significant influence over other firms by possessing other firm's share, the share should be evaluated by applying equity accounting method. In this case, the complexity of equity method accounting entity which consists of the investor and the investee can have significant influence on audit report lag. Prior research studies examining the factors that determine audit report lag considered complexity of consolidated accounting entity in the model that predicts audit report lag. However, these factors were not considered in the similar research in Korea (Kim 1996, Na and Choy 2004). This paper tries to find the reason why the longer audit report lags with the larger accruals (in absolute value) not in the earnings management explanation, but in the complexity of Equity Accounting Method entity. The researchers tested five year data of 332 firms to answer this question and found that the higher the importance of Equity Accounting Method income or the larger the difference in net income between separated and consolidated financial statements, the higher the audit report lag. The results will contribute to existing research by adding the complexity of Equity Accounting Method entity that explains the audit report lag. The consolidated financial statements are not primary financial information to investor of capital market in Korea due to legal system managing the financial reporting of Korean firms. The main obstacle to conversion into providing investor consolidated financial information was worry about the delay of financial report. This paper is of importance in that it touched the problem of financial report delay expected when the financial reporting system is converted into consolidated reporting basis with empirical evidence for the first time in Korea.