RISS 검색 - 국내학술지논문 상세보기

다국어 초록 (Multilingual Abstract)

An audit committee has been introduced to enhance management transparency and reliable financial reporting of Korean listed firms in the wake of the 1997 economic crisis. The prior studies concerning the effectiveness of the audit committee have reported contradictory results. The purpose of this study is to empirically investigate into whether the audit committee recently introduced to Korean firms effectively carries out its monitoring role in the financial reporting. The extant studies have provided empirical evidence that resonable composition and implementation of the audit committee are the important elements for its success. This study investigates the relationship between the characteristics of the audit committee, measured with its independence, proficiency and activity level and the frequency of finding and reporting of the prior period accounting errors of financial statements. The reason why this study uses accounting errors rather than discretionary accruals is that research models to estimate discretionary accruals cannot avoid the measurement error problem and accounting errors have no such measurement error problem. Multi-variate logit models have been established for this study. Whether accounting errors are reported in the financial statements or not is included in the models as a dependent variable. Whether the introduction of the audit committee is introduced or not and the characteristics of the audit committee, independence, proficiency and activities level are included in the models as independent variables. Additionally, some extraneous variables, firm size, leverage, profitability, and auditor change are included as control variables. This study finds that there has been no significant relationship between introduction of the audit committee and frequency of accounting error reported, but frequent meetings of audit committee tend to contribute to deter occurrence of accounting errors. This result is similar to that of prior foreign studies in that implementation of the audit committee, not simply an introduction of it, is more important for its success. The study provides empirical evidence that only the activities level among the characteristics of the audit committee is related to frequent reporting of accounting error, which is different from foreign studies. The empirical findings imply that introduction of an audit committee itself has no effect on reliable financial reporting. There has been some argument that an audit committee should be compulsorily introduced to Korean listed firms as well that have audit director systems regulated by commercial codes. However, this study implies that such change in corporate monitoring systems have no practical validity now and requires more prudent judgement and studies to investigate its feasibility in detail. This study also implies that the reasonable implementation of an audit committee, not simply an introduction of it, is more important for reliable financial reporting.

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참고문헌 (Reference)

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9 "Survey for Improving Outside Director System" Korea Listed Companies Association 2000

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