계속감사기간이 감사시간과 감사보수에 미치는 영향

Absence of the independence of auditors has caused committing financial reporting fraud, therefore discussions that address the independence with respect to auditors have started to mitigate it. In Korea, the Mandatory Audit Firm Rotation has been introduced to enhance the independence of auditors. However, the mandatory audit firm rotation decreases the efficiency of audit due to discontinuance of audit tenure. Accordingly, regulations have revised as of February 2010 in order that public corporations could appoint the same auditor for 6 business years from the application of the International Financial Reporting Standards(IFRS). In this context, we examines whether audit hours and audit fees are associated with audit tenure. To be concrete, this study is to analyze that continuance of audit tenure has created the efficiency of audit by examining the association between audit hours and audit tenure, and audit fees and audit tenure. We expect that the efficiency of audit along with audit tenure will reduce audit hours. However, audit fees are expected to show positive or negative direction along with audit tenure. If audit hours are decreased by the efficiency of audit, audit fees may decrease when audit tenure is longer. On the other hand, audit fees may increase for auditors to be compensated on improved audit quality along with audit tenure. The results show that audit hours decrease when audit tenure is longer than 3 years. In particular, the efficiency of audit increases when audit is carried out for 3 years and over. On the other hand, audit fees increase when audit tenure is longer. Under the Low Balling circumstance, this result comes from charging a higher audit fees as a compensation for the higher audit quality due to audit tenure. This study implies that the efficiency of audit is analyzed with a direct measurement, that is, the real time spent in audit. The results show that the abolition of the Mandatory Audit Firm Rotation increases the efficiency of audit. In addition, this study shows that the efficiency of audit is not reflected to audit fees, which is expected to have important implications for follow-up studies to analyze the determinants of audit fees. Also the findings of this study could have implications for government organizations to decide on relevant policies. This study has following limitations. First, this study does not consider possibilities that the rotation of partners and audit assistants within the same audit firm could influence audit hours. For public companies in the Korea stock market, the same partner can not carry out audit on the same firm for 3 years and over. For the audit assistants, it is required that over two-third of the same audit assistants is to be rotated when audit is carried out for 3 years and over. Thus the results may be biased because these possibilities are uncontrolled. Second, audit hours disclosed in the annual report are controversial on the reliability. Although we pay attention to select samples of audit hours, sample selection bias may occur in the results.