감사위원회의 특성이 선도형 경영전략을 채택하는 기업의 공격적 이익조정 수준에 미치는 영향

Prior studies document that firms that using prospector strategy are more likely to manipulate earnings aggressively, compared with firms that using defender strategy, to report higher earnings. Alternatively, studies on corporate governance document that firms with a superior quality audit committee, which plays a role to monitor corporate behavior, are less likely to manipulate earnings aggressively. By combining these two lines of studies, this study investigates whether the characteristics of an audit committee, namely independence, expertise, activity, and power of the committee, influence the association between the use of prospector strategy and the magnitude of discretionary accruals, which is the proxy for the aggressive earnings management. The findings of this study are summarized as follows: First, consistent with the findings in prior studies, this study documents that the magnitude of income-increasing earnings management increases as the firms use prospector strategy. However, the audit committee with superior quality (i.e., the committee with independent directors, with at least a member with financial expertise, working more actively, and having a relative power) reduces the association between the magnitude of earnings management and business strategy. As a result, for the firms with the superior quality audit committee, there exists no significant association between them. These findings provide interesting and important implications into the behavior of firms and audit committees, showing that the audit committee plays an effective role to monitor corporate behavior.