감사법인 강제교체제도 도입을 둘러싼 논란: 현황파악 및 선행연구의 발견에 대한 문헌검토와 정책제언

This study reviews prior literature to assess what we currently know about the mandatory audit firm rotation policy and to analyze the advantages and disadvantages of implementing the policy. The effect of implementing the mandatory audit firm rotation policy is a topical issue since regulators are considering the revival of this policy, which was in effect from 2003 to 2011 in Korea. Our research on the current status of adoption of similar policy in 69 different countries reveals that only 28 out of the 69 countries adopted the mandatory audit firm rotation policies and a much greater number of countries have instead mandated the rotation of audit partner, rather than audit firm. Summarizing the research on the effect of long auditor tenure, we find that there is no relation between auditor tenure and audit quality or some evidence showing that longer tenure leads to lower audit quality. However, there is also a flurry of evidence that contradicts this view. Specifically, the evidence suggests that mandating audit firm rotation may result in limiting auditor’s opportunities in accumulating knowledge about a specific client, therefore, leading to lower audit quality and even impaired auditor independence. Further, a closer look at prior studies reveals that, overall, longer auditor tenure leads to improved audit quality, measured by various proxies. We also find that the results using auditor independence in appearance as a proxy for audit quality is inconclusive. Taken together, it is plausible that implementing a mandatory audit firm rotation, which leads to shorter auditor tenure in general, comes at the cost of deteriorating audit quality. In contrast, prior studies using Korean setting suggest that mandatory auditor designation may have positive effects on audit quality. Our findings have implications for policy makers and academicians.