증권관련 집단소송제 도입 이후 감사인의 보수성 변화 = The Effect of Securities Class Action on Auditor Conservatism

다국어 초록 (Multilingual Abstract)

This paper examines whether the enactment of the Securities Class Actions in Korea affects the auditors` conservatism in their opinions. It also investigates whether the difference in conservatism between Big 4 auditors and Non-Big 4 auditors is increased or decreased after the enactment of the Securities Class Actions. The auditor conservatism is measured as the propensity of going-concern modified audit opinion. Empirical results are as follows: First, the proportion of going-concern modified audit opinion significantly increased after the enactment of the Securities Class Actions. This results imply that auditors became more conservative for financially distressed firms in order to manage a litigation risk. Second, the difference in conservatism between Big 4 auditors and Non-Big 4 auditors was decreased after the enactment of the Securities Class Actions. Specifically, before the enactment of the Securities Class Actions Big 4 auditors had issued the going-concern modified opinions more frequently than Non-Big 4 auditors. After the enactment of the Securities Class Actions, however, the proportion of going-concern modified audit opinions issued by Big 4 auditors did not differ from that of Non-Big 4 auditors. Due to the fact that Big 4 auditors had conducted conservative audit even before the enactment of the Securities Class Actions, they had little room to increase the conservatism. On the contrary, Non-Big 4 auditors had enough room for improvement of conservatism, which lead Non-Big 4 auditors into auditing more conservatively because of increasement of substantial legal responsibility after the enactment of the Securities Class Actions. This study provides empirical evidence for the effectiveness of the Securities Class Actions from audit point of view. Since the Securities Class Actions in Korea has been enacted there have been few lawsuits. Thus, there remains considerable doubts over the effectiveness of the Securities Class Actions. Although real cases bring the effectiveness of this law, the existence itself also can potentially affect audit market. This study shows that conservative audit after the Securities Class Actions has positive effect on protecting minority shareholders and enhancing accounting transparency. We conclude that enactment of the Securities Class Actions leads to positive effect on overall audit quality of the audit market.

참고문헌 (Reference)

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