회계법인의 품질관리 수준을 결정하는 회계법인 특성

External audit has a positive impact on credibility of financial statements by reducing the agency cost that arises from the conflict of interests between shareholders and managers, whereby increasing firm value. Thus, adequate regulation is imperative to maximize the efficacy of external audit and regulation on quality control in accounting firms plays a central role in the external audit regulation. The Financial Supervisory Service and KICPA have been conducting quality control inspections as regulation on quality control since 2007. Using the results of quality control inspections, this study examines accounting firm characteristics that are likely to affect the quality of quality control systems of accounting firms. The results for medium and large accounting firms reveal that accounting firms are likely to have higher quality control systems when they are affiliated with global accounting firms and/or they are operated as one-firm. Furthermore, the quality of quality control systems increases with the ratio of engagement partners to total partners and decreases with the number of clients for which each accountant hired by the accounting firm serves. In contrast, small accounting firms tend to have higher quality control systems when the ratio of listed clients is high and/or the average number of experience of staffs is low. These results suggest that accounting firm characteristics determining the quality of quality control systems differ between medium and large accounting firms and small accounting firms.