내부통제제도에 대한 외부감사와 기업의 운영 효율성

Though external auditor reviews for internal control systems of Korean listed firms have been in place for the past 15 years, it was mandated in 2019 that audit client firms’ internal control systems must be audited. This paper investigates whether the mandated external audit for the internal control system has any effect on a firm's operational efficiency. Here, operational efficiency is measured by the data envelopment analysis developed by Demerjian et al.(2012). We use small listed firms that were not required to be audited as a control group in our difference-in-differences analysis. The empirical results reveal that the operational efficiencies improve after the adoption o f the mandatory external audit for the subset of the selected firms, with the exception of larger firms whose asset size is greater than 2 trillion Korean won. In contrast, the proportion of the selling and administrative expenses out of the sales increase for all firms. The increase of audit costs, as well as labor costs for those who handle internal control related-tasks, may potentially explain this increase of selling and administrative cost. These findings provide important policy implications in demonstrating the benefits of the mandated audits for internal control system.