개정 회계기준 관련 회계오류의 발생과 내부통제 및 외부감사인 기능의 관련성 : 기업회계기준서 제15호 및 적용의견서 06-2 개정을 중심으로

Korea Accounting Standards Board(KASB) published the revised SKAS No. 15, Investments in Associates, and KAI Opinion 06-2, Deferred Income Taxes on Investments in Subsidiaries, Associates and Interests in Joint Ventures, in March and February 2008, respectively, saying that these changes are to have the standards for equity-method accounting under Korean GAAP consistent with the “one-line consolidation” concept in accounting theory. Since these changes are related to the complicated accounting of equity-method investments and deferred income taxes, and are announced in the timing of the first quarter book closing process, it was not easy for the Korean companies to properly understand the standard changes and to correctly and timelily report the change effects in the first quarter financial reporting. We find that, out of 259 companies having reported accounting changes in the second quarter of 2008, 164 companies or 63% restated or corrected the first quarter accounting change disclosures; this represents that large number of Korean public companies have failed to properly and timelily report the accounting changes in the first quarter 2008 financial reporting. Quality of accounting information is improved through two processes by which accounting errors are detected and corrected: (i) the internal financial statement preparation process and (ii) the external assurance process. i.e. accounting errors could be identified and corrected by both of financial statement preparation and assurance processes. (The “assurance process” represent the function that external auditors provide assurance on the financial statements by expressing (audit or review) opinions, in the material respects, which improves the quality of accounting information in the information communication process.) The former is affected by the company's internal control effectiveness such as its self-closing capability and external regulation on the company's internal control system. The latter is affected by external assurance (audit or review) function's involvement. The accounting errors included in the final reporting in the first quarter of 2008 of Korean public companies represents that such company's and auditors' processes failed to detect them before finalization of filing of quarterly reports. This study investigates whether the errors in responding to accounting standard changes are associated with the error firm's internal control effectiveness or external auditor function availability. Under the context of the risk model perspectives discussed above, and based on the previous researches, hypotheses for error firm characteristics have been established as follows. First, internal control effectiveness would be associated with less accounting errors(larger size [or corporate governance] and more stringent external regulations on the company's internal control [i.e. general internal control standards vs. small-medium size company internal control standards] were used as the proxy of internal control effectiveness). Second, external auditor's review would decrease accounting errors. For testing of this hypothesis, it was assumed that the error would decrease if the first quarter financial statement disclosure was subject to the external auditor's reviews. The results of this study generally show that the internal control effectiveness and the external auditor's review have significant negative relationship with accounting errors, and seriousness of the errors as well. These findings are generally consistent with the hypothesis of this study and provide certain practical implications for improvement of company's competency to adopt complicated accounting standards. Certain recommendations could be derived from the implications; which include (i) extension of mandatory external review for quarterly reports, (ii) private accountants for IFRS reporting by large-sized companies or financial institutions, (iii) improvement of professional capability of firms and accounting firms, and (iv) commitment by participating parties (reporting companies, auditors and accounting firms, and regulators) to adhere to the global level accounting practice This study has contributions by identifying control weakness firms related to company's self-closing capability and by finding the effects of the company's internal control and external auditor's involvement (review function) to properly apply the complicated accounting standards, as revised, to their own financial reporting through the Korean companies' experiences of errors in reporting accounting standard change effects in the first quarter of 2008. Such control weaknesses or accounting errors under the context of company's capability of proper accounting and financial statement preparation have never been identified by the previous researches. Also, certain practical implications are suggested regarding how to support companies' own capability to adopt new accounting standards; it would have practical implications for Korean companies, auditors and regulators to prepare for initial adoption of IFRS in 2011.