발생액의 질이 감사시간 및 감사보수에 미치는 영향에 관한 연구

We investigate whether auditors take into account accruals quality, a proxy for the information risk associated with earnings. Our study is motivated by recent theoretical research that shows that information risk is a non-diversifiable risk factor. By information risk, we mean the likelihood that firm-specific information that is pertinent to investor pricing decisions is of poor quality. We assume that cash flow is the primitive element that investors price and identify accruals quality as the measure of information risk associated with earnings. That is, accruals quality tells investors about the mapping of accounting earnings into cash flows. Relatively poor accruals quality weakens this mapping and, therefore, increases information risk. The notion of accruals quality is first introduced by Francis et al. (2005). They investigate the relation between accruals quality and the costs of debt and equity capital. They find that firms with poor accruals quality have higher costs of capital than do firms with good accruals quality. In addition, they document that accruals that reflect economic fundamentals (innate accruals) and accruals that represent managerial choices (discretionary accruals) have different cost of capital effects. Management biases, subjective judgments contained in accruals may mislead financial statement users to make poor decisions. Thus, they implicitly expect that external auditors, who are independent and professional, play a role of taking out intentional errors or fraud contained in accruals. Thus, in order to confirm the social role of audit, it is critical to examine whether auditors, in fact, assess the accruals quality and utilize this assessment in making audit plans and implementing audits. We expect that auditors have incentives and abilities to assess the quality of accruals by adjusting audit procedures and substantive tests. Accruals quality can be viewed as a barometer of the likelihood that fraud or errors occur. The less likely accruals are to be converted into operating cash flows and/or the greater the conversion of accruals into operating cash flows are, the higher audit risk auditors face. In this case, auditors professionally respond to the information risk by making more audit effort and requiring higher audit fees. The uncertainty of future cash flows when the source of accruals is from innate accruals is greater than the uncertainty when the source of accruals is from discretionary accruals. Thus, auditors will respond to the greater information risk by spending more audit hours and demanding higher audit fees. We measure accruals quality (AQ) as the absolute value of residuals and the standard deviation of residuals from regressions relating current accruals to cash flows. The results of empirical tests show that there is a negative relation between accruals quality and audit hours/fees, indicating that poorer AQ is associated with larger audit hours and audit fees. This suggests that auditors adjust their audit effort and demand higher compensation for higher information risk. We also distinguish between accruals quality driven by economic fundamentals (innate AQ) versus management choices (discretionary AQ). Both components have significant effects on audit hours and audit fees, but innate AQ effects are significantly larger than discretionary AQ effects. This result implies that auditors' professional response varies with the source of accruals quality. We believe these results have implications for assessments of reporting quality. First, we provide systematic evidence that reporting quality as captured by accruals quality is salient for investors. We provide evidence that reporting quality matters. Second, our results contradict an implicit assumption that reporting quality is largely determined by management's short-term reporting choices. Our results suggest that in broad samples, over long periods, reporting quality is substantially more affected by management's long-term strategic decisions that affect intrinsic factors. Third, auditors professional respond to the information risk for each audit engagement, indicating that they play a monitoring role to reduce the information risk associated with the accruals quality.