재무기준에 의한 감사인 지정사유의 확대가기업의 재무비율에 미치는 영향

This research examine the association between the adoption of a new mandatory auditor designation rule based on financial criteria and companies’ financial ratio adjustments. According to the rule, public companies, whose debt-to-equity ratio is more than 200% and more than 1.5 times of industry average, and interest coverage ratio is less than 1, should be audited by designated auditors for following fiscal year. If companies are audited by designated auditors because of the financial criteria, companies could pay higher audit fees, and have an disadvantage when they raise capital. Therefore, companies have incentives to adjust financial ratios. Also, companies could manage their earnings to increase interest coverage ratios, so we analyze whether they engage in earnings managements using discretionary accruals and real earnings management measures. To verify this, we classify sample firms with non-designated firms and designated firms according to the new criteria. The empirical results show non-designated firms’ debt-to-equity ratio is significantly lower than that of designated firms. However, we cannot find any association between non-designated firms and interest coverage ratios. This results indicate firms focus more on debt-to equity ratios rather than interest coverage ratios. Also, we find non-designated firms do not engage in earnings management. This research is meaningful to examine the effect of the new criteria in an external auditor designation rule on companies’ financial ratios directly.