회계이익의 불투명성이 감사보수 및 감사시간에 미치는 영향

We investigate whether the relation between financial reporting opacity (or opaque earnings) for individual firms based on Hutton et al. (2009) and audit fees as well as audit hours. Specifically, this paper examines the effect of financial reporting opacity related to the audit risk of a auditor on audit fees and audit hours. Auditors who have responsibilities to provide assurance to reliability of the financial statements may concern about audit risks arising from managers’ earnings management incentives. Auditors are expected to assess higher inherent risk for firms with aggressive discretionary accruals and thus higher audit effort and charge higher fees. Hence, the relation between audit fees and financial reporting quality, including earnings management, has received considerable attention in audit research. However, prior literatures on the association between discretionary accruals and audit fees primarily investigate whether audit fees or total fees affect the level of discretionary accruals, which look at audit quality from the side. But, there is a few studies that investigate whether discretionary accruals affect on the determinants of audit fees (or hours). Furthermore, studies examining the relation between the levels of discretionary accruals and audit fees document report mixed results. For example, Gul et al. (2007) show a positive relation between discretionary accruals and audit fees. In contrast, Park et al. (2012) show a negative relation between discretionary accruals and audit fees. In addition, Park (2005) find no relation between discretionary accruals and audit fees on average. Despite a growing literature on the determinants of audit fess and hours of auditor and also financial reporting opacity (Hutton et al., 2009; Kim and Zhang, 2014; Kang and Choi, 2016 etc.) respectively, there is little evidence of whether and why the financial reporting risk associated with opaque earnings influences audit production. To extend this line of research, we do attempt to higher opaque earnings relate to higher inherent risk or audit risk which translates into higher audit effort and higher audit fees in both cases. This is, we predict that firms with opaque financial reporting have higher both audit fees and audit hours because auditors perceive these firms to be more audit risk. For analysis, the first proxy (OPAQUE) of this study is the earnings management measure of information opaqueness of Hutton et al. (2009). Following Hutton et al. (2009), this paper measures financial reporting opacity as the prior three years moving sum of absolute value of discretionary accruals, where discretionary accruals (DA) are estimated by the modified Jones model (Dechow et al., 1995). The second proxy (OPAQUE_std) of this study is the earnings management measure of information opaqueness, which is prior three years standard deviation of discretionary accruals as documented more econometrically by our suggestion. These measure intends to capture both the abnormally high accruals in the year of overstatement and the subsequent reversal of prior accrual overstatements. This study sample covers listed firms in non-financial industries with fiscal year-end in December from 2004 to 2015. The empirical findings of this paper are following. First, after controlling for several factors that affect audit fees and audit hours, we find that audit fees significantly increase for opaque earnings clients over the past three years. These result is consistent with this study using both OPAQUE and OPAQUE_std measures. Second, we find that auditors increase audit hours for opaque earnings clients, suggesting that opaque earnings positively influence audit efforts. These result suggests that auditors perceive opportunistic earnings management activities as increase in audit risk. Our results are robust to a variety of sensitivity checks such as an alternative specification. However, we do not find the positive association between our first proxy for opaque earnings (OPAQUE) as documented by Hutton et al. (2009) and audit hours. Whereas, we find the positive association between our second proxy for opaque earnings (OPAQUE_std) and audit hours. Third, consistent with prior research (Park et al., 2012), we find the negative association between discretionary accruals with a single-year measure (DA) and audit fees as well as audit hours. Fourth, when we partition our samples into Big 4 and non-Big 4 auditor subsamples, we find the positive association between opaque earnings and audit fees is more significant for non-Big 4 auditees than Big 4 auditees. However, we find the positive association between opaque earnings and audit hours is more significant for Big 4 auditees than non-Big 4 auditees. These provides evidence consistent with the extant literature on audit quality that Big 4 auditors have more reputation concerns to protect than non-Big 4 auditors and are therefore more concerned about risk of financial reporting opacity as a result of managerial opportunism. Thus, Big 4 auditors would exert more effort than non-Big 4 auditors. Finally, when we partition the samples into pre- and post-2014 period (position-specific audit hours disclosure since 2014), we find that the positive relation between opaque earnings and audit hours is stronger during post-2014 period. Overall, using two proxies for opaque earnings (or financial reporting opacity), we provide novel evidence that the audit fees and audit hours increases significantly with financial reporting opacity, whereas audit fees and audit hours decreases significantly with the level of discretionary accruals in the short-run. In particular, we confirm that our firm-specific measure of opacity (OPAQUE_std), which prior three-year standard deviation of discretionary accruals is a reliable predicator of audit fees as well as audit hours, compared with opacity measure by Hutton et al. (2009). Our study adds to the literature in the following ways. First, our study suggests that improving financial reporting opacity can increase auditors’ perception of audit risk. Moreover, while Hutton et al. (2009) employ a self-constructed measure of opacity, we also use a new objective measure opacity, such as prior three years standard deviation of discretionary accruals level, which considered to be refine proxy for low-quality financial information. Second, our study is related to the audit pricing literature. To the best of our knowledge this is the first study to examine the relation between opaque earnings and audit fees as well as audit hours. Lastly, this paper contributes to a deeper understanding of these determinants by examining how financial reporting opacity affects audit fees and audit hours. Therefore, the results of this paper may provide useful information to academics as well as investors and regulatory bodies that evaluate the reliability of external audit by using audit fees and audit hours information.