감사품질이 기업의 이익조정에 미치는 영향

This study examines the relation between audit quality and earnings management. Consistent with prior research, we treat audit quality as a dichotomous variable and assume that Big 4 auditors are of higher quality than Non-Big 4 auditors(industry expertise(specialization) auditors are of higher quality than non-industry expertise auditors. We employ discretionary accruals to capture earning management and discretionary accruals are estimated by a cross-sectional model of Kothari et al.(2005). Prior literature suggests that auditors are more likely to restrict management's accounting choices that increase earnings (as opposed to decrease earnings) and that auditors are more likely to be sued when they are associated with financial statements that overstate earnings (as compared to understate earnings). Therefore, we hypothesize that clients of lower quality auditors report discretionary accruals that increase income relatively more than the discretionary accruals reported by clients of higher quality auditors. This hypothesis is supported by evidence from a sample of 10,754 firm years. And also we found that higher-quality audit would be more effective in deterring accounting manipulation than the lower one if the earnings manipulation incentive exists at the first place.