증권집단소송제 도입이 감사보수에 미치는 영향

The paper examines the policy effects of the securities Securities Class Actions in korea on external auditors' audit fees. In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. Class Actions may offer a number of advantages because they aggregate a large number of individualized claims into one representational lawsuit. It is mainly because the suits aggregation can increase the efficiency of the legal process, and lower the costs of litigation. Korea becomes the third adopting Securities Class Actions following US, Canada. The regulation authorities introduce the law enactment in two phases. The first implementation is made in 2005, which is applied for the firms with above two trillion korean won asset amount in their prior fiscal years, and the second implementation is in 2007 for the firms with less than two trillion korean won asset amount in their prior fiscal years. We investigate if there are significant changes in audit fees after the first and second implementations of the Securities Class Actions in 2005, 2007. Managers and auditors are exposed to more higher potential litigation risks after the implementations. Others argue that there is no policy effects of Class Actions providing there has been few class actions raised since 2005. Samples are 3,438 firm-year which are selected form the listed firms in Korea Stock Exchange from 2002 to 2007. We investigate the policy effects in view of auditor fee change before and after of each implementation in 2005, 2007. Empirical results show that audit fees have been increased after both of Securities Class Actions implementations, indicating auditors' perceptions of higher exposures to Class Actions litigations. We also introduces audit hour as a control variable, because it is assumed that audit hour affects audit fee. But, it is also possible that audit fee affects audit hour. This paper adopts simultaneous equations to control the endogeneity between audit fee and audit hour. After controlling the endogeneity between audit fee and audit hour, the firms with 2 trillion asset amount below shows significant changes in audit fees before and after the second implementation. And the firms with 2 trillion asset amount above shows significant changes in audit fees before and after the first implementation. Recently, Korean Fair Trade Commission, the regulation authorities for Class Actions is affirmatively considering to broaden the coverage of class actions not only for the securities related aspect. The empirical results indicate that the serial implementations of class actions affect on the behavior in process of compiling, auditing, announcing the financial statements of listed firms. After six years of the law enactment, those results provide additional evidence evaluating the policy effects of Securities Class Actions in view of external auditors.