대우조선해양 감사인의 명성 훼손 이후 감사투입 및 감사품질의 변화

The purpose of this study is to examine the changes in audit input and audit quality of the auditor after the auditor’s reputation has been damaged due to the audit failure of Daewoo Shipbuilding & Marine Engineering(DSME). Deloitte Anjin Accounting Firm(Anjin) was appointed as an auditor of DSME for 6 years from fiscal year 2010 to fiscal year 2015, and was suspended from work for one year by the Financial Services Commission in April 2017 due to the audit failure for the period of appointment as an auditor. Anjin had a reputation as a Big 4 auditor, but its reputation was severely damaged by the audit failure of DSME. Although the audit failure of DSME might not represent the overall audit quality of Anjin, it failed to consistently maintain all audit quality above a certain level. This study empirically examined through the case of Anjin whether there is an incentive to restore the reputation after reputation damage. To this end, the business suspension was regarded as an event of damage to the reputation of the auditor, and the period before and after the suspension was compared to determine whether there was any change in audit input and audit quality by applying a difference-in-difference method. As a r esul t of r egression anal ysis, it w as f ound t hat the audit hours of A njin w as i ncreased significantly and the audit fees per hour was decreased significantly after the reputation damage incident. At the same time, a significant increase in audit hours and a decrease in hourly audit fees were also found for other auditors after the damage to the reputation of Anjin. In addition, it was found that the audit quality of Anjin was increased significantly after the reputation damage incident. This suggests that more rigorous audits are being conducted to restore reputation. However, increase of audit quality was not found for other auditors after the damage to the reputation of Anjin. Research on the damage to the reputation of auditors has mainly been conducted to observe whether or not s tock market has reacted negativel y to t he a uditor’s c l ients. But t his study i s differentiated f rom prior research in that it focused on the incentives of the auditor to restore the damaged reputation, and analyzed what changes have occurred to auditors after the damage to the reputation. The findings of this study provide an understanding of the reputation damage and reputation rebuilding activities of auditor. And it is also useful policy implications to the accounting supervisory authority.