감사수정이 이익품질에 미치는 영향

Preliminary earnings release are earnings announced immediately after internal preparation of financial statements in an unaudited status. They receive increasing market’s attention and are perceived as a proper proxy of final earnings figures. However, managers may have strong incentives to manipulate the preliminary earnings to influence investors’ perceptions about the firm’s future performance. Managers may use their flexibility opportunistically to influence the market’s perception of the firm’s performance. This study examines how audit adjustments to the preliminary earnings as a result of year-end audit procedures, affect earnings quality. I investigated the consequences that auditors and their clients face when earnings announced in an unaudited status which are subsequently revised so that earnings as reported in the annual report differ from earnings as previously announced in this paper. This study investigates whether managers opportunistically round up the preliminary earnings and whether the rounding manipulation of the preliminary earnings is more severe than that of final earnings. There are two key findings. First, I found the irregularity in the distribution of the first digit and second digit of the preliminary earnings figures. Second, irregularities in the digit of the preliminary earnings figures disappeare after an audit adjustments. This means that an audit adjustment to preliminary earnings cause earnings quality improved. These findings are of interest to researchers who use earnings properties as proxies for earnings quality and audit quality.