감사투입시간이 감사품질에 미치는 영향의 분석-세무조사 가능성에 미치는 영향을 중심으로

The study investigates whether the audit quality, which is affected by audit hour, has an effect on corporate tax reporting and further the probability for tax investigation. In ordinary cases whether auditors do not provide the “auditor-provided tax service” (APTS), the increase in audit hour has contradicting effects, tax quality improvement effect, which reduces the probability for tax investigation, and taxable income reduction effect, which increases the probability, and thus the overall effect of the increase in audit hour needs thorough examinations. Furthermore, in other cases whether auditors provide APTS, the increase in audit hour has an additional effect on the probability, taxable income reduction effect, which reduces the probability. The results of this study, based on declared tax investigation cases of public firms, show that, out of two feasible effects of the increase in audit hour, tax quality improvement effects proves to be more dominant. That further implies that the risks from tax investigations could be defended by enough commitment of audit hour, and auditing itself has favorable functions on client firms. However, the results of this study also show that APTS has no significant effect on the probability, and, when combined with the tax quality improvement effect, the original effect to reduce the probability no more stands. The detrimental effect of APTS on the probability implies that providing APTS itself could be regarded as important factors in the tax investigations selection process of the taxing authorities. Further analyses show that the tax quality improvement effect is mainly produced during normal audit hours, not during abnormal audit hours which needs special audit efforts. That further implies that as long as general audit hours are invested enough, the tax risks of client firms could be lowered substantially, and thus auditing itself should be more strongly founded.