감사보수 및 재무제표 대리작성의 문제점과 개선방안

This paper investigates issues concerning external audits with respect to audit fees and financial statement compilation services. The current audit fee levels are too low and thus recognized among accounting profession, academia, and regulators as one of the most serious issues affecting audit quality. Auditing is to ensure the integrity of financial data. Audits exist because they add value through easing the cost of information asymmetry, not just because they are required by law. Without the audit, the lending party would not have assurance as to whether or not the company's financial position is accurate. The current practice where auditors compile clients’ financial statements could seriously compromise auditor independence due to self review threats. Auditor independence is often defined as the probability that the auditor will report a discovered breach in the financial reports. This suggests that auditor independence is synonymous with auditor objectivity and the ability to withstand client pressure to acquiesce to substandard reporting. While nearly all cases involve audit services, several cases entail less than a full scope audit (e.g., review or compilation services). By focusing on audit services supplied to specific clients, the study excludes a variety of litigation against public accounting firms. Also, audit clients view compilation services as part of an auditing service and thus regard audit service as having little impact on firm value. There is considerable research on whether the Big N auditors can command an audit fee premium and, if so, whether this premium represents a lack of competition in the audit market or quality differences in the competitive audit markets . Auditor independence is a vital issue in the market for auditing services. Many definitions exist in the literature. It has often been alleged that the competition for audit contracts may enable the manager of an audited firm to entice the auditor to conceal disadvantageous information from or even to misrepresent information to the owners and the general public. As a result, several auditing practices have come under scrutiny for their potential to undermine auditor independence. Somewhat related is the allegation that audit quality would also deteriorate if audit firms used predatory pricing to induce clients to switch from their incumbent auditors. Predatory pricing might be employed with the expectation of receiving either management advisory service contracts from the new clients or higher future audit fees. The lower prices charged for the initial audits of new clients, however, might again motivate audit firms to reduce the quality of early audits to be retained over multiple periods. Analysis shows that average audit fee in Korea is 11.03 ~ 27.54% of that in Japan and 7.18~23.54% of that in the U.S after controlling for firm size. With audit fees remaining at such a low level for so long, the number of those who want to become CPAs is dwindling. Also Korea’s top three universities account for 28.3 % of those who pass CPA exams, down by 18% from 46.3 % ten years ago. This paper reports that the issue of low audit fees is mainly due to the External Audit Act and other regulations governing auditor selection and retention. This paper recommends an overall review of the current auditor retention system and also calls for a deliberation on the future impact of additional regulations on auditor independence. Also, a high tendency for Korea’s audit clients to rely on auditor’s compilation services could adversely affect auditor independence. The issue of auditor independence due to compilation services could be partially resolved by firms’ efforts to hire more competent accounting staff and re-educate their current related staff. Firms may need to establish communication channels and protect and compensate whistle blowers so that they can report practices of auditor financial statement compilation.without any personal and economic losses. This paper also recommends enacting regulations to punish a practice where financial statements to be audited are signed by a person who is not their genuine preparer. This paper may contribute to improving audit quality and activating the audit market by investigating the issue of excessively low audit fees and auditors’ compilation services, and by recommending solutions to these problems.