감사인의 실제-계약 시간차이 및 보수차이와 감사품질의 관계: 감사품질의 측정을 위한 새로운 접근

From 2020, firms are required to report how the audit hours and fees are predetermined under the audit contracts, allowing information users to compare the actual audit hours and fees with contractual terms. We explore whether the differences between the actual performance and the audit contract (“actual-contractual differences, ACDs”) in audit hours and fees serve as a new measure of audit quality. To this end, we examine whether the ACDs in audit hours and fees are related with other proxy of audit quality, discretionary accruals. With Korean listed firms from 2018 to 2020, our findings are summarized as follows: First, the ACD in audit hours/fees is positively related with the discretionary accruals, respectively. Second, audit quality is higher (lower) when ACDs in audit hours and fees are both positive (negative). Third, we find that the ACD in hourly fees and the involvement of experienced upper-level auditors (quality control reviewer and director) moderate these relations. Collectively, these results suggest that the ACDs in audit hours and audit fees properly represent the audit quality. Finally, we also find that the audit quality is higher under the cost-reimbursement contracts than it is under the fixed fee contracts. We contribute to literature and practice by empirically proving the ACDs identified under the corporate disclosure can be reasonably relied upon when gauging the audit quality, which has not been explicitly observed in the marketplace.