중·소형 회계법인의 합병이 감사품질에 미치는 영향

[Purpose] This paper aims to examine the relation between merger of small and medium－sized accounting firms and audit quality. In order to increase accounting transparency, Korea implemented the audit registration system in 2019. Accordingly, mergers between small and medium－sized accounting firms occurred frequently in the audit market. In the prior study, there suggest that the larger the accounting firm, the higher the audit quality. Therefore, the merger between small and medium－sized accounting firms is expected to play a role in improving audit quality. However, considering the current governance between small and medium－sized accounting firms in Korea, it can be predicted that the merger of accounting firms can be means to meet the formal requirements of audit registration system, and ultimately the audit quality will not change. [Methodology] The merger sample is for mergers between small and medium－sized accounting firms that occurred in 2019. Four years from 2017 to 2020 were the sample period, Based on the merger in 2019, the two years before and after the merger and one year before and after the merger are compared. This study analyzes the effect on the discretionary accruals of the audited company when it is audited by a merged accounting firm. [Findings] For the two years before and after the merger analysis, the discretionary accruals of companies audited by the merged auditor decreased. Similarly, for the one years before and after the merger analysis, the discretionary accruals also decreased. These results showed that audit quality increased due to the merger of small and medium－sized accounting firms. [Implications] The results of this study suggest that the auditor registration system to induce improvement of audit quality has a positive effect on audit market. In addition, this study reconfirms prior studies that the larger the size of the auditor, the higher the audit quality.