의결권 및 배당권의 차이와 기업규모 및 기업의 위험과의 상호작용이 감사보수에 미치는 영향

This study investigates the effect of the divergence between voting right and cash flow right of controlling shareholders. In particular, we investigate if the divergence per se and the interactions between the divergence and firm size and firm－specific risks influence the audit fees. Corporate governance mechanism in Korea is relatively weak. In many large conglomerates, controlling shareholders have only a fraction of shares but control many companies through pyramidal structure ownership and cross－shareholdings. In such a situation, voting right of the controlling shareholders is usually far greater than cash flow right of the shareholders, giving incentives to the controlling shareholders to expropriate the wealth of the minority shareholders. With 447 firm－year observations collected from Korean stock market over 2003－2005 period, we find the followings. First, there exists significant negative association between the divergence and audit fees, confirming the findings in a prior study using Korean data. Second, the interaction term between firm size (measured by market value of equity) and the divergence is negatively associated with the audit fees, suggesting that the negative association between the divergence and audit fees are more pronounced among larger firms. Third, the interaction term between firm－specific risk (measured by return on assets) and the divergence is positively associated with the audit fees. These findings suggest that the divergence somehow captures the amount of audit works that need to be performed by auditors due to larger firm size or firm risk. Alternatively, when we use leverage ratio as a measure of firm－specific risk, we fail to find significant association between the interaction term between the divergence and the leverage ratio and audit fees. This finding suggests that the leverage ratio and the divergence captures different aspects of auditor efforts, respectively.