Recent literature suggests that compared to non‐local CEOs, local CEOs care more about reputation capital and hence exhibit a longer‐term orientation. Building on this literature, we address the audit pricing of CEO locality. Our empirical analyses reveal fees for firms with are lower than those without suggesting risk associated clients. Seeking underlying reasons, indeed find both client business misreporting CEOs. results robust using matched sample, controlling potentially correlated...

Despite regulators' on‐going concerns on the high concentration of current audit market, effects auditors' behavior is still debated. We provide an answer to this unresolved issue by considering role legal regime in shaping pricing strategy a concentrated market. Using data from 33 countries, we find no significant association between market and fees pooled international sample. However, country's changes dramatically: significantly positive countries with weak but becomes weaker eventually...

This study investigates how the presence of accounting executives is related to readability narratives in 10-K reports. We find that companies with tend prepare more readable reports than those without. Furthermore, we document higher executives' positions within executive group hierarchy, better Overall, findings suggest characteristic pursuing precise information explains delivery pattern The results expand two strands literature: one for determinants and other role profession team.

Abstract We explore whether CEOs’ hometown identity involves labour adjustment decisions. document that local CEOs, with their ties, reduce employment to a lesser degree following sales downturns than nonlocal CEOs. This finding suggests strong attachments motivate them prioritise employee interests and build good reputations, which create private benefits or reserve future career paths in hometowns. Our findings are more pronounced areas where connections highly valued, thus supporting our...

This study examines whether auditor switching for opinion shopping (OS) influences investors' perceptions of audit quality (proxied by earnings response coefficients; ERCs). To the extent that deteriorates after firms switch auditors OS, investors are less likely to rely on these firms' audited earnings. may result in a negative association between OS and ERCs. However, when intention is undetected investors, ERCs would do not differ depending or not. We find have lower than non-switching...

This article examines the spillover of stock price crash within business groups. Using Korean group data, we find that risk a firm is positively associated with other member firms in same group. We also crashes spread but do not arise simultaneously across Further analyses reveal documented association stronger more inter-company transactions and those lower market-to-book ratios. Our contributes to literature by suggesting consequence opportunistic behaviors controlling shareholders (i.e.,...

Purpose This study aims to examine whether debt financing creates incentives for private firms engage in earnings management via classification shifting. Especially, the authors debt-induced financial reporting differ depending on type of (i.e. public bonds versus loans) and such are influenced by characteristics external auditors initial audits auditor size). Design/methodology/approach The uses data 93,427 Korean from 2001 2016. Classification shifting is measured positive correlation...

Following large-scale auditor consolidations in the late 1980s and early 1990s, along with Arthur Andersen’s collapse 2001, global audit market has become highly concentrated during past 30 years. Many interested parties, including regulators, researchers, practitioners, disagree on whether concentration would benefit or harm market. To address this unresolved issue, we consider role of legal regime shaping auditors’ incentives. Specifically, first develop a model which plays significant...

ABSTRACT We study the importance of organizational context for relation between human capital investment and firm performance. Using unique data from Korean-listed firms, which were previously required to disclose information about union membership, we predict find that presence unions attenuates favorable identify productivity, future employment, cost behavior as channels through this result could operate. Overall, show benefits commonly associated with investments in are contingent on...

Abstract Prior studies on the link between country‐level cultural aspects and firms' arbitrary accounting practices are scant, they show mixed results. To gain more insight about impact of national culture earnings characteristics, we exploit matching concept revenues expenses, which well reflects managerial estimation discretion in quality. Using a large sample 57 countries over period 1989–2012, find that (1) economic association expenses becomes stronger firms from collectivistic high...

본 연구는 우리나라 상장기업들의 회계감사인의 선택에 대한 수요함수를 추정하고, 이를 바탕으로 최근 도입된 감사인 주기적 지정제로 인한 피감기업 소비자잉여(consumer surplus)의 변동을 계량화한다. 2005년부터 2018년까지 유가증권시장과 코스닥시장에 상장된 기업표본을 대상으로 분석한 결과, 6년 계속감사기간 이후 감사인을 지정받는 피지정기업들이 감수해야 할 효용감소분은 시장 전체 수준에서 최소 695억원에서 최대 756억에 이르는 것으로 나타났다. 이는 인해 피감기업들이 감내해야 하는 비용이 무시할 수 없는 수준임을 시사한다. 2015년 대우조선해양 회계분식 사건 회계감사와 관련된 각종 규제가 대폭 강화되면서 기대효과에 논의는 활발히 진행된 반면, 이에 수반되는 규제비용에 상대적으로 미미하였다. 정책목표를 달성하기 위하여 비용을 고려하지 않고서는 정책의 전반적인 유효성을 평가하기 어렵다는 점을 강조하면서, 효과적인 정책수립을 위한 비용편익분석의 필요성을 그러나...

전통적인 가치평가 모형에 따르면, ESG 활동이 기업가치를 제고하기 위해서는 기대현금흐름과 이의 불확실성을 반영하는 할인율을 개별적으로 혹은 유기적으로 개선하여야 한다. 본 연구는 매출액 및 영업이익률 증가를 통해 기대현금흐름을 개선하거나, 자기자본비용 또는 타인자본비용을 낮추어 제고하는지 실증적으로 분석한다. 2011-2019 기간에 걸쳐 구성된 한국기업지배구조연구원의 점수자료를 이용한 분석결과, 점수와 간의 유의한 관계는 찾을 수 없었으나, 점수가 높을수록 타인자본비용 자기자본비용은 유의적으로 낮다는 결과를 일부 발견하였다. 그러나 이들 변수 인과관계를 살펴본 그레인저 분석에서는 ESG의 점수 변화가 영업이익률의 변동, 타인 자기자본비용의 변동을 견인한다는 증거를 없었다. 이러한 결과는 시간에 따라 보이지 않았을 뿐만 아니라, 활동에 대한 대체적 점수를 사용했을 경우에도 그대로 유지되었다. 활동과 기업가치 결정요소들과의 상관관계와 인과관계에 차별적으로 제시함으로써, 최근...

본 연구에서는 산업별 외부감사인의 교체 빈도가 감사품질에 어떠한 영향을 주는지에 대해 분석한다. 많은 국가의 규제기관들이 감사 정책 수립을 위해 감사시장의 경쟁이 미치는 영향에 꾸준히 관심을 가지고 있으나 현재까지 학계에서는 이에 대한 명확한 결론을 도출하지 못하고 있다. 기업의 외부감사인이 자주 교체되는 것을 감사계약 수임을 위한 치열하다는 증거로 보고, 빈도를 감사시장 경쟁의 척도로 활용하여 앞선 질문에 답을 찾고자 한다. 산업-연도별로 측정된 재량적 발생액의 절대값을 감사품질의 대용치로 이용하여 실증 분석을 수행한 결과, 평균적으로 빈도와 감사품질 사이에는 유의적인 관련성을 발견할 수 없었다. 그러나 회계법인의 규모에 따라 표본을 구분하면 대형회계법인의 피감기업에 대해서는 감사인 높을수록 감사품질이 향상되는 결과를 발견하였다. 이는 심할 때 대형회계법인은 감사품질을 높임으로써 경쟁에 대응하는 반면, 중소형회계법인은 그러지 않는다는 보여준다. 연구는 새로운 지표를 효과를...

Abstract This paper documents the difference in asymmetric labor adjustment between male and female employees, as alluded to economics literature. Based on detailed gender-specific employment disclosures of Korean-listed firms, we report a significant presence cost stickiness. Breaking costs down, further show that stickiness is mainly attributable rather than wages. More importantly, this more salient for males it females, suggesting managers tend dismiss females greater extent during sales...

Credit rating agencies have often been a target for criticism due to their inaccuracy and untimeliness. This paper sheds light on this issue by examining how an optimistic credit influences corporate decisions. We use Korean ratings construct the measure of optimism as deviation actual from benchmark based US ratings. find that has negative association with cost debt positive relation financing investment. also between investment future performance is weaker firms finding suggests inaccurate...