회계법인의 재무적 특성이 감사품질에 미치는 영향

This paper examines the relation between auditor's financial characteristics and audit quality. Given that audit quality is jointly determined by auditor competence and independence, auditor＇s financial characteristics, such as productivity, profitability, financial soundness, and relative importance of audit service, may have an impact on audit quality by directly/indirectly affecting auditor competence and independence. To test the association between auditor‘s financial characteristics and audit quality, this paper uses performance matched discretionary accruals(PMDA), and accounting errors(ERROR) as proxies for audit quality. Also we consider productivity, profitability, financial soundness, and relative importance of audit service as a auditor’s financial characteristics. We predict that the higher productivity is, the lower audit quality is.(hypothesis 1) This is based on Choe(2012) reporting that immoderate works of individual CPA cause of low-audit quality. We use the revenue per a CPA as a proxy for productivity. Also, we anticipate that the worse auditor’s profitability and financial soundness are, the lower audit quality is.(hypothesis 2 and 3) Because auditors with poor profitability and financial soundness can tend to discount audit fee for accepting business, this may lead to spend less audit hours than required hours and affect negatively to audit quality. Also they may be exposed to opinion shopping more easily than auditors with good financial soundness. Lastly, we consider the relative importance of audit service. The higher the relative weight of revenue from audit service in audit firm is, the more audit firm may be concerned in audit service in order to prevent the loss of reputation from audit failures.(hypothesis 4) This paper investigates audit quality data of 7,203 firms-years from 2004 to 2010, and the results are as follows. First, the likelihood that errors are included in client firms' financial statements decreases as auditor＇s productivity decrease. This means that the immoderate works of individual CPA can induce some mistakes and affect to audit quality negatively. Second, it is observed that the weaker financial soundness of audit firms are, the lower the audit quality is. This implies that auditors with poor financial soundness provide the poor auditing service, because they tend to excessively discount the audit fees and accept business with the purpose of recovering the financial status. Third, audit quality is positively related with relative importance of auditing in auditor's total revenue. Audit firms with high revenue from audit service are specialized in auditing, so the potential loss from audit failures can be large to them. This result implies that auditors relatively specialized in audit service are more careful of audit quality. Investigating the relation between auditor characteristics and audit quality can be viewed as one of the primary subjects in audit research. Extending the prior studies which mainly focus on the size or the industry expertise as auditor’s characteristics. Our contribution is that we incorporates various financial characteristics of auditors, which are productivity, profitability, financial soundness, and relative importance of audit service. Especially, we find that auditor’s financial soundness and the importance of audit service affect to audit quality. The results that audit firms' various characteristics should be taken into account for the improvement of audit quality have implications for the supervisory authority for audit firms and market participants.