이익조정과 경영자 과신성향 및 파트너 감사시간의 관계

[Purpose] This study examines the effect of audit efforts on earnings management using the database of audit hours by rank. First, it is examined whether firms with high executive overconfidence had a high level of earnings management. After the examination, it is investigated whether the phenomenon could be alleviated with a high partner's audit hour. [Methodology] This study analyzes the listed firms in Korea from 2014 to 2017(6,625 firm－year observations) with multiple regression method. [Findings] It is observed that the level of earnings management is higher on average in the case of high executive overconfidence. In addition, it is found that the level of earnings management is low when the partner's audit hour is high. However, the effect of partner's audit hour on earnings management is significant when executive overconfidence is high, while that of partner's audit hour on earnings management is insignificant when executive overconfidence is low. [Implications] The results of this study suggest that the partner's audit hour is more important when the executive overconfidence is high. This research has following contributions. The results suggest that supervisory institutions need to supervise external audit work with understanding of the phenomenon presented in this study. In addition, this study expands the research in the field of auditing at the partner level by providing the empirical results of the partner's audit efforts that have been actively conducted recently.