분·반기검토시간이 영업권 손상 및 주석공시에 미치는 영향

This study investigates the effect of interim review on goodwill impairment and disclosure. Interim reviews are expected to enhance the effectiveness of audit work at year-end and therefore improve financial reporting quality. As the amortization of goodwill is eliminated, and the impairment- only approach is accepted under current K-IFRS, the degree of management discretion in the financial reporting of goodwill is greatly increased. Management’s estimates of goodwill are mainly based on unverifiable characteristics, assumptions, cash flow projections, etc., and auditors are required to evaluate the reasonableness of goodwill estimates focusing on factors used in management’s estimation process. This study tries to find out whether interim review increases financial reporting quality of goodwill, in particular, the timeliness of goodwill impairment and compliance of disclosure requirements. Using a sample of KOSPI firms over the period 2014-2019, a setting where data on interim review hours is available, this study examines the effectiveness of interim review in terms of timely recognition of goodwill impairment and compliance of relevant disclosure. The results show that an increase in interim review hours is positively associated with goodwill impairment when an impairment indicator exists. This study also finds interim audit hours are positively associated with compliance with goodwill disclosure requirements. This suggests that interim review enhances the effectiveness of auditing goodwill at year-end. Interim review enables auditors to identify challenges and issues in evaluating goodwill proactively. This study makes important contributions by extending the academic literature that examines the effectiveness of interim review.