회계법인의 감사실패와 공인회계사의 이탈

CPAs(Certified Public Accountants) are the key asset of accounting firms. Since the turnover costs of CPAs a re h igh, r etaining C PAs is a q u ite c ritical issue in a ccou nting firms. I n this r egard, t his stu dy investigates whether the reputation loss of the audit firm caused by regulatory sanction affects the actual tu rnover d ecision of i ndividu al C PAs. W hile p rior s tudies o n audit failu re(i.e., regulatory s anction) analyze client firm-level data, this study exploits audit firm-level data. To examine the reputation losses of sanctioned audit firms in the CPA labor market, we hand-collected the monthly employment data of the respective audit firm and the accounting information on the audit firm’s annual reports from the websites of Korean Institute of Certified Public Accountants(KICPA) and financial supervisory service(FSS), respectively. In this study, we firstly use 16,889 audit firm-month observations for the period from 2003 to 2016. Then we match observations based on an audit firm’s probability to receive regulatory sanctions by employing propensity score matching. Such matching procedure may mitigate the potential endogeneity concerns in estimating the treatment effects of sanctions. In so doing, the sample size decreases to 2,760 audit firm–month observations(230 for sanctioned audit firms as treatment group and 230 for control group, multiplied by 6 months). Our findings are summarized as follows. First, we find that CPAs leave after the announcement of the sanction of the audit firm that they work for, providing an evidence of the contagion effects of audit failure. Second, as the results of cross-sectional analyses, we find the negative association between the announcement of an sanction against an auditor and CPAs’ turnover is more prevalent for the case of au dit firms’ s anction with f ine, a udit firms with g reater c oncentration o n CPA headcou nts, a u dit firms with greater economic dependence on client firms, Big4 auditors, and audit firms with financial constraints. Our empirical results hold robust to several alternative models considering endogeneity concerns. In sum, t hese f indings provide valu able implications f or r esearchers, practitioners, a nd r egu lators w ith timely and important insights not only on the contagion effect of the sanctioned audit firms but also on the recent discussion of the proper number of new CPAs given the revision of the Act on External Audit of Stock Companies, the regulations on standard audit hours, and the enforcement of the 52-hour per week.