감사인의 피감기업에 대한 경제적 의존도가 감사시장의 경쟁과 감사보수 및 감사시간 사이의 관계에 미치는 영향

The Effect of Auditor’s Economic Dependence on a Client on the Association between Audit Market Competition and Audit Fees and Hours

선행연구에서는 감사시장에서 경쟁이 치열하게 발생할 때 감사보수가 하락하지만 감사시간은 변하지 않는다는 것을 발견하였다. 즉 감사인들 사이에 치열한 경쟁이 발생할 때 감사인들이 감사보수를 낮춰서 신규 피감기업을 유치하지만 감사시간은 덜 투입하지 않는다는 발견이다. 본 연구에서는 감사인의 피감기업에 대한 경제적 의존도가 이런 감사시장의 경쟁–감사보수/감사시간/시간당 감사보수 사이의 관련성에 영향을 미치는지를 살펴보았다. 그 결과 경제적 의존도가 낮다면 경쟁이 심하더라도 감사보수가 덜 하락한다는 것을 발견하였다. 그러나 경제적 의존도는 경쟁과 감사시간 사이의 관계에 영향을 미치지 않았다. 즉 감사보수의 하락은 시간당 감사보수가 하락하기 때문에 발생한 현상이었다. 이런 관련성은 모두 non-Big 4 감사인 때문에 도출된 것이었으며, Big 4 감사인의 경우에는 피감기업에 경제적 의존도가 이런 관련성에 전혀 유의적인 영향을 미치지 않았다. 이런 발견은 감사시장의 경쟁과 감사인의 피감기업에 대한 경제적 의존도가 미치는 효과에 대해 규제기관, 학계, 실무계, 그리고 투자자를 비롯한 재무제표 정보이용자에게 여러가지 시사점을 제공한다.

The topic of the effect of audit market competition on auditor behavior has received great concern from regulators across the world. They concern whether the lack of competition generates auditor collusion with clients and thus results in poor audit quality. Accordingly, prior studies have investigated the effect of auditor’s economic dependence on a specific client on audit quality, or on the association between audit market competition and audit quality. They document that auditors sacrifice audit quality when the competition of audit market is fierce, however, that auditors’ incentives to sacrifice audit quality are significantly reduced when auditors’ economic dependence on their clients is lower because compromising the audit quality is less beneficial to the auditors. Expanding the prior studies, we investigate whether the economic dependence for an auditor on a specific client influences the association between audit market competition and audit fees/hours. To construct a proxy for the auditor’s economic dependence, we use the ratio of audit fees paid by an auditee to total audit fees earned by the auditor. The degree of audit market competition i s measured by the number of auditors providing audit service in a specific industry-year. Data on audit fees/hours are collected for Korean firms listed in the stock market. The sample period starts from 2005 and ends at 2018. Our findings are summarized as follows. First, as documented previously, as the audit market competition intensifies, audit fees decrease. Second, as an auditor’s economic dependence on a client decreases, the negative association between audit market competition and audit fees weakens. Third, audit hour is not associated with audit market competition or the interaction between audit market competition and auditor’s economic dependence on a client. Fourth, as documented previously, as the audit market competition intensifies, audit fees per audit hour decrease. Fifth, as an auditor’s economic dependence on a client decreases, the negative association between audit market competition and audit fees per audit hour weakens. Finally, we find that the above-mentioned findings are all attributable to non-Big 4 auditors. For Big 4 auditors, we fail to find that auditor’s economic dependence influences the association between audit market competition and audit fees/hours. These findings suggest that large auditors maintain relatively stable and high-quality service while non-Big 4 auditors’ behavior depends on the economic dependence on a client and the level of audit market competition. In sum, our study provides regulators, practitioners, and researchers with timely and important insights into the effect of the auditor’s economic specific-client-dependence on the association between audit market competition and audit fees/hours. We call for further research on this issue using the recent M&A of Korean audit firms in near future.