감사품질과 보수주의에 따른 발생액의 시장이례현상

This study examines how audit quality and conservative accounting affects earEARNngs persistence and equity valuation. we split Earnings into accruals and cashflows and investigate the relationship between those and conservatism separately. Under conservative accounting, expenses or losses are immediately recognized while revenues or gains are not until uncertainty surrounding economic events is resolved. We study whether the two components(audit quality and conservative accounting-related accruals) of earnings forecast future earnings with differential persistence and whether market participants fully reflect their predictive abilities when they sets share prices(Mishkin test, 1983). The samples used in this study are 6,931 firms registered in Korean Stock Exchange from 2000 to 2010 excluding financial and insurance business. This study uses the estimation model of Paek Won-sun and Lee Soo-ro(2004) as a proxy for conservative accounting. This paper reveals that the persistence of conservative accounting-related accruals for future earnings is smaller than non conservative accounting-related accruals. Our results also reports that the participants of stock market overprices the contribution(persistence) of audit quality and conservative accounting-related accruals when predicting future earnings.