감사수익성이 감사노력의 효과에 미치는 영향: 직급별감사시간을 중심으로

This study investigates the relationship between audit engagement profitability proxied by hourly audit fees on audit quality. Recent studies and regulators have worried that audit fees discount may harm audit quality. Specifically, to respond to discounted audit fees auditors may decrease their level of audit hours or allocate more hours to the low-cost lower-level auditors, which directly impact audit quality, because less total audit hours or more time allocations to the unexperienced auditors means that the required audit procedures to maintain audit quality cannot be performed or can only be ineffectively performed. In this study, we tested whether the impact of audit effort proxied by audit hours on audit quality measured by discretionary accruals is affected by audit engagement profitability proxied by hourly fees, using the per-rank audit hours data disclosed from 2014. Our findings are as such. First, although we discovered the positive effect of audit effort on audit quality for the full sample, we failed to find the same effect for the low-profitable subsample. This means that engagement profitability affects audit quality by influencing the effectiveness of audit effort. Second, we found that even the experienced upper-level auditors failed to perform effective audits when the profitability is low. Last, such ineffectiveness of experienced auditors in the low profitability environment was the same for the long-tenured auditors, who accumulates enough customer-related knowledge. Our study implies that without engagement profitability neither the regulatory control for minimum audit hours introduced by the new standard audit hours system nor the audit efficiency of experienced auditors may not be able to guarantee audit quality. Therefore, we suggest that the regulatory body should consider regulating minimum audit fees also. Because we also found that the audit effects are the greatest when auditors are both long-tenured and highly profitable, we may suggest that the recent legislation to limit auditor tenure may not be an effective policy.