감사보고서의 강조사항 기재와 주가급락위험과의 관련성

[Purpose]This study investigates the relationship between the emphasis of matter paragraph (EOM) in the audit report and stock price crash risk. Specifically, we empirically verify whether the managers of the firms that disclosed potential risks through EOM accumulates negative information afterwards or tries to ease information asymmetry, providing implications for the management behavior of the companies with EOM. [Methodology]The study use a sample of 13,071 company－year listed companies from 2012 to 2019 after the adoption of the Korean International Financial Reporting Standards. In addition, we use two major measures (skewness and volatility) proxied for stock price crash risk. [Findings]We find a significant negative relationship between EOM in audit report and stock price crash risk. This suggests that the disclosure of potential risks through EOM contributes to narrowing investors’ differences in corporate valuation by lowering managers’ negative information accumulation and concealment incentives, which indicates that EOM plays a critical role in decreasing the risk of the stock price plunge in the capital market. [Implications]This study has a contribution that empirically shows that the auditor’s explanatory paragraph in the audit report could be related to the improvement of the company’s information environment.