감사위원회의 설치와 이익조정사이의 관계|RISS 상세보기

다국어 초록 (Multilingual Abstract)

During the Asian financial crisis, many Korean firms were blamed for their opaque management and family-owned ownership structure. To alleviate the severe problem in corporate governance for large Korean conglomerates(so-called Chabol), the Korean government, from 1999, mandated the establishment of audit committees for large companies listed in the stock market. The audit committees are required to include at least three board members and at least 2/3 of them must be outside directors. None of the Korean companies had an audit committee before the creation of the law. This study examines whether the audit committee establishment(voluntary and mandatory) is related to the decreased earnings management in the firm. If audit committees perform the function of a watch-dog for managers` opportunistic behavior, the magnitude of earnings management would decrease as the result of the new establishment of audit committees. For the study, earnings management, as measured by discretionary accruals, is estimated using a cross-sectional version of the modified Jones model(Dechow, et al. 1995). The samples used in the study are 116 firm-year observations, among which were 14 firms that established an audit committee voluntarily and the remaining 102 that were required to establish the committee by the law. A total of 1,037 firm-year observations that did not establish the committees are used as comparison samples. The sample selection period is 2000 and 2001. The results of this study are summarized as follows. First, we do not find any significant decrease of earnings management for the firms that established audit committees compared with the same firms during the period before the establishment. Second, there exists no difference in earnings management between the firms that established audit committees and firms that did not do so at the same time period. When we divide the establishment samples into either voluntary or mandatory establishments, we do not find any differences. The results of this study suggest that rather than the establishment of an audit committee itself, the characteristics of the committee, such as independence and competence of the committee, may be more important factors in decreasing the manager`s opportunistic behavior. We expect that the results of this study are very timely and useful for regulators as well as academics and business practitioners.

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참고문헌 (Reference)

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