본 연구는 감사품질이 경영자 예측정보의 편의성 및 정확성에 미치는 영향에 대하여 살펴본다. 감사품질이 높을수록 예측치에 실적치를 맞추려는 경영자의 재량권을 제한함으로써 경영자가 보다 정확한 예측정보를 공시하도록 유도할 것으로 예상된다. 본 연구에서 감사품질은 감사능력을 나타내는 감사인의 규모(BIG4 여부)와 산업전문성 이외에도 감사노력을 반영하는 비정상 감사시간으로 측정한다. 경영자 예측정보의 편의성(bias)은 경영자의 예측치와 실적치 간의 차이를 당기 매출로 나눈 값으로, 예측정보의 정확성(accuracy)은 예측편의에 절대값을 취해 측정한다. 본 연구는 유가증권시장상장기업 중 2002년부터 2008년까지의 기간에 경영자 예측정보를 공시한 638개의 기업-연 자료를 분석에 이용하였다.
본 연구의 실증분석 결과 대형회계법인에게 감사를 받거나 감사인이 추가적인 노력을 기울일수록(즉, 비정상 감사시간이 많을수록) 경영자 예측정보의 정확성은 높아지는 것으로 나타났다. 이러한 결과는 감사품질이 높을수록 경영자의 재량권이 제약되기 때문에 경영자는 되도록 실제치와 예측치의 차이를 줄여 부정확한 예측으로 인한 손실을 최소화하고자 한다는 것을 의미한다. 특히, 대형회계법인이 아니더라도 또는 산업전문성이 없는 감사인이라도 추가적인의 추가적인 감사노력이 감사인의 평판이나 산업전문성을 보완하는 중재적 역할을 한다는 것을 보여준다. 추가분석 결과 특정 고객에 대한 경제적 의존도가 높아 감사인의 독립성이 저해될 수 있는 상황이라 할지라도 비정상 감사시간이 많으면 경영자 예측정보의 편의성은 줄어들고 정확성은 높아지는 것으로 나타났다.This study examines the effect of audit quality on the bias and accuracy of management forecasts. Management forecasts are voluntary in nature, and thus may not be reliable since managers may exercise discretion over the content and timing of management forecasts disclosures. However, high audit quality may restrict managers to exercise their discretion in the financial statements. This forces managers to forecast their sales and earnings as accurate as possible given that the discrepancy of forecasts from the actual numbers may cause managers to be legally liable.
Audit quality is known as an elusive concept due to the difficulty to observe and measure. DeAngelo (1981) suggested that audit quality is jointly determined by auditor independence and auditor competence. Setting auditor independence aside, prior studies used audit firms size (BIG affiliation) and auditors’ industry specialization as proxies for audit competence to address audit quality. However, one thing the audit quality literature did not consider is audit effort. The more audit hours an auditor makes, the higher audit quality is likely to be. An auditor can professionally respond to a particular audit contract by determining how much audit effort he/ she needs to make, while auditor reputation and industry expertise is beyond the scope of an individual auditor’s decision.
This study examines whether Big 4 auditors or auditors with industry expertise induce managers to forecast with higher accuracy than non-Big 4 auditors or those with no industry expertise. In addition, the forecast accuracy is also higher when auditors make additional audit effort controlling for audit complexity and risk. We employ two proxies- forecast bias and forecast accuracy. This study uses the 638 firm-year management forecasts released by firms listed on the Korea Stock Exchange for the period of 2002 to 2008.
Empirical results show that firms audited by Big 4 tend to have more accurate management forecasts, but no significant difference in forecast bias. When an auditor has industry expertise, no significant difference in management forecast bias and accuracy is observed. In addition the more additional effort an auditor makes (i.e., abnormal audit hours are positive), the more accurate management forecast is. In summary, it appears that there is a positive relation between audit quality and management forecast accuracy. This result is consistent with the explanation that high audit quality restricts managers to exercise their discretion in the financial statements and thus forces them to forecast as accurate as possible in order to reduce the cost associated with the inaccurate forecast (e.g., litigation risk and/or stock price plunge).
One notable empirical result is the effect of audit effort on the relation of audit quality proxied by Big 4 affiliation and auditor industry specialization with management forecast accuracy. That is, the accuracy of management forecasts improves even for firms audited by non-Big 4 or industry non-specialist auditors if they make additional effort by spending audit hours more than the expected level of hours given audit complexity and audit risk. This result is interesting because it shows that audit quality is determined by not only audit competence but also audit effort. Note that audit firm-level audit competence can not be changed overnight. On the other hand, contract-level audit effort can be adjusted based on the risk assessment. This evidence illustrates the importance of professional responses to the audit risk to assure a certain level of audit quality, which has not been considered in the audit quality literature.
Prior studies show that the joint provision of non-audit services to audit clients increases audit risk due to the greater economic dependence on the clients. The empirical test provides the evidence that auditors’ additional effort can improve the accuracy of management forecasts even for the highly economic dependent clients. It appears that the concern about auditor independence in the presence of non-audit service provision to audit clients may be mitigated by providing additional audit effort. Overall, the results of this study suggest that market participants should use the audit hour information disclosed in the business report as well as the auditor reputation and expertise in judging the accuracy and credibility of management forecasts.