지정감사인이 더 높은 감사보수를 받는가? = The Effect of Auditor Designation on Audit Fees

다국어 초록 (Multilingual Abstract)

This study examines whether designated auditors charge higher fees than those who are appointed by auditees. The government designates an auditor for firms when they have high incentives to manipulate accounting figures due to high leverage and non-separation of ownership and management. The designated auditor`s tenure is three years and guaranteed unless the reason for the designation is resolved during the three-year tenure. Hence, the designated auditor is independent of the client and is enabled to charge higher fees than auditors who are appointed by firms. Our results show that audit fees of designated auditors are on average higher than those of auditors hired by clients. This is consistent with the argument that the designated auditors` three-year tenures are guaranteed by the government and therefore they are more independent of the auditees. Furthermore, initial audit fees for designated auditors are much higher than fees for their continuing audits or fees for auditors appointed by auditees. These results suggest that price cutting on initial audit engagement occurs only when the initial audit market is competitive and quasi - rent is expected from continuing engagements.