Does the Asset Impairment Enhance Analyst Forecast Accuracy?

정주렴,이호영 한국회계학회 2016 會計學硏究 Vol.41 No.3

This study examines how the asset impairment affects analysts’ forecasts. Regulatory boards suggest that asset impairment provides useful information in predicting future firm cash-flow, while several studies raise concerns on substantial high flexibility in timing, measurement, and disclosure contents of impairment. We first examine whether analysts’ forecast accuracy and bias for one to three years ahead earning differ in firms with asset impairment when compared to firms without impaired assets. Next, we examine whether analyst forecast accuracy for firms with asset impairment differs after the reinforced regulation with International Financial Reporting Standards (IFRS) adoption. Using the firm-years from 2006 to 2013 listed in Korea, we find evidence that asset impairment charges are related to more optimistic and less accurate analyst forecasts. This result implies that opportunistic recognition for earning management or complexity in measuring impairments may lower informative contents of asset impairment on future earnings. Secondly, we find that the enforced IFRS adoption has no significant impact on the association. These results are robust after controlling for firm characteristics or self-selection bias using Heckman 2 stage or propensity score matching. These findings have valuable implications for users of financial statements including financial analysts and regulators.

The Effect of Asset Revaluation on the Cost of Debt: Evidence from Korea

정주렴,김영준,이호영 한국회계학회 2014 회계저널 Vol.23 No.3

During the 2007-2010 financial crisis, the Korean government allowed asset revaluation, which was to be introduced with the adoption of the IFRS, earlier than scheduled, in an attempt to strengthen firms’ financial position. As a result of this allowance, many firms introduced asset revaluation which increased the size of assets and stockholders’ equity. This paper studies whether asset revaluation during that period had an impact on firms’ cost of debt. More specifically, using the firm-years listed on the Korea Exchange during the recent financial crisis, we examine the changes in the cost of debt as proxied by credit ratings and bond spreads. We find that, on average, asset revaluation has no effect on the cost of debt. The positive effect of asset revaluation is limited to credit rating for highly-leveraged firms. Our findings suggest that bond rating agencies are sensitive to the likelihood of a debt covenant violation while bond market investors do not interpret asset revaluation as a fundamental improvement of the firm’s financial condition. Our results imply that asset revaluation can be marginally effective in mitigating the effects of the financial crisis.

경영자 능력이 기업의 투자효율성에 미치는 영향

정주렴,김범준,권세원 한국회계정보학회 2017 회계정보연구 Vol.35 No.1

This study empirically investigates how the management ability enhances investment efficiency. Following McNichols and Studden (2008), we define over- or under-investment when the firms invest more or less than optimal investment. Management ability is measured by Data Envelop Analysis used in Demerjian (2012). Using 4,744 listed samples covering the period of 2005-2014, we suggest that the managerial ability is positively associated with investment efficiency by reducing both over- and under-investment. Also we find that during financial crisis, manager ability further decreases over-investment. These results suggest that more abled managers invest more efficiently considering the overall economic circumstances around the firm. This study contributes the literature by suggesting additional evidence how the management ability enhances the firm performance suggested by Ko et al. (2013) and Demerjian et al. (2013), and by extending the recent researches on impact of management ability. Also this study provides valuable implication to investors and board of directors by providing evidence that the able managers consider the general economic circumstances and investment efficiently. 본 연구는 경영자 능력이 기업의 투자효율성을 제고하는지 실증적으로 분석하였다. 경영자능력은 Demerjian et al.(2012)의 측정치를 활용하였고, 기업의 투자효율성은 McNichols and Stubben(2008)의 측정방법을 이용하여 산출하였다. 분석결과, 경영자 능력이 높을수록 과소투자 및 과대투자가 감소하여 투자효율성이 증가하는 것으로 나타났다. 또한, 글로벌 금융위기당시 능력있는 경영자는 과대투자를 적극적으로 감소시킴으로써 투자효율성을 제고한 것으로나타났다. Demerjian et al.(2012)이 DEA기법을 통한 경영자능력 측정방법을 제시한 이후 경영자 능력에 따른 이익조정, 조세회피와 같은 다양한 의사결정에 미치는 연구가 활발히 이루어져 왔다. 본 연구는 경영자의 능력에 따라 기업의 투자의사결정이 달라지며 투자효율성이차별적임을 제시함으로써 기존 연구를 확장하였을 뿐만 아니라. 경영자 능력이 기업 성과를높이는 선행연구(고창열등 2013, Demerjian et al. 2013)를 지지하는 추가적인 증거를 제시한다. 뿐만 아니라, 글로벌 금융위기와 같은 외부환경의 충격에도 경영자 능력이 높은 기업의 투자효율성이 높다는 점을 제시함으로써 이사회 및 투자자에게 중요한 시사점을 제시하고 있다.

Predictive Ability of Unverifiable Fair Value Accounting: Evidence from Asset Impairment

정주렴,이호영 한국회계학회 2016 會計學硏究 Vol.41 No.4

This study investigates whether asset impairment disclosure better enables investors to incorporate future earnings using a future earnings response coefficient (FERC) model. Using Korean firm-year data from 2006 to 2011, we find that impairment disclosure and impairment charges are negatively associated with the FERC. This negative relationship is stronger for firms with income smoothing or big bath incentives and those with impairment of non-financial assets. However, external monitoring as reflected by majority shareholder ownership or industry specialist auditors mitigates this negative relationship. No significant impact of strengthened accounting rules through IFRS adoption on the FERC of asset-impaired firms is evident. These results are robust after controlling for firm characteristics and self-selection bias. These findings imply that disclosure of asset impairment does not provide useful forward-looking information, as the regulatory boards intended, and may even decrease the predictive ability of firms with opportunistic earnings management incentives. The findings also suggest that effective monitoring systems enhance information value, although reinforced regulation through IFRS adoption does not. These findings have valuable implications for regulators, academics, and investors.

재무분석가의 관점에서 살펴본 자산재평가 전후의 회계정보의 유용성 차이

정주렴 ( Ju Ryum Chung ),김영준 ( Young Jun Kim ),최종학 ( Jong Hag Choi ) 한국회계학회 2013 회계학연구 Vol.38 No.1

Asset revaluation (hereafter AR) is the process of increasing or decreasing the carrying amount (value) of assets to account for major changes in fair market value of the assets. AR was introduced in Korea after the Korean government announced on November 2007 the plan to adopt International Financial Reporting Standards (IFRS) starting from 2009. As a part of the pre-adoption processes of IFRS, the Financial Supervisory Service (FSS), which is the equivalent to the Securities and Exchange Commission in the United States, allowed AR starting from 2008. As a result, several companies voluntarily chose to revaluate their assets during 2008 and 2009, before the formal adoption of IFRS. Before this, assets were normally recorded in financial statements using the cost method, which records the value of the assets at their historical cost less accumulated depreciation and accumulated impairment losses. In such a case, there is no upward adjustment to the recorded value due to changing circumstances. In contrast, the AR allows both increase and decrease of the carrying amount of assets following the change of the fair market value of the assets. AR has both pros and cons. The cost method provides more reliable but less relevant accounting information. In contrast, AR allows firms to choose what to revaluate and thus firms may choose AR for its opportunistic purpose. In addition, there are many assets for which the fair market value is not clearly measurable. However, the revaluated accounting information is more relevant for investors` decision-making regarding value estimation. As a result, the accounting information after AR becomes more relevant but less reliable. In summary, it is not clear if the advantages of AR dominate the disadvantages or vice versa. We try to tackle this issue in this study by focusing on analysts` use of financial statement information. Financial analysts use accounting information reported in financial statements. If financial statements prepared after AR are more useful than those prepared under the cost method, then the financial analysts should provide more accurate and less biased earnings forecasts. It is because higher-quality financial statement information allows financial statement users to predict the future more clearly (Behn et al. 2009; Feng et al. 2009). As a result, the quality of the decision of the information users needs to be improved if AR provides more useful information. We empirically examine this prediction using financial analysts` earnings forecasts and investigate if the forecast accuracy and bias changes as a result of the AR. Using 1,341 firm-year observations, we empirically examine these issues. Our empirical results are summarized as follows. First, we divide the total sample into two groups based on actual engagement of the AR (i.e., firms engaged in asset revaluation and firms that are not). We fail to find any significant differences in analyst forecast error and bias between these two groups, in both the pre-revaluation period (year 2007 and 2008) and the post-evaluation period (year 2009 and 2010). This finding suggests that the two groups of firms are not significantly different in characteristics of analysts` forecasts before AR, as well as after AR. Second, using a difference-indifference methodology, we fail to find any changes in the effect of AR from pre- to post-revaluation periods. In summary, these findings suggest that analyst forecast error and bias do not differ between firms that revaluate assets and other firms that do not engage in AR. In contrast to this finding, a prior study of Choe and Son (2011) reports that firms engaged in AR show less optimistic and more accurate earings forecasts. We try to reconcile these differences. We find similar results as those in Choe and Son (2011) if we include interaction terms between AR dummy and leverage ratio. The results documented in this study suggest that the decreased reliability of the information after AR may offset the increased relevance of the accounting information. As a result, there are no significant changes in the usefulness of financial statement information. These findings provide valuable implications for regulators, academics, analysts, and investors. This study is limited to the analyst forecast view only, and future research may extend this view and look into this issue in more detail.

주기적지정기업의 시간당 감사보수에 따른 감사품질

박현영,정주렴,조은정 한국세무회계학회 2024 세무회계연구 Vol.- No.81

[연구목적] 본 연구는 주기적 지정제도로 인하여 감사인이 변경된 기업의 감사품질이 시간당 감사보수에 따라 차별적인지 검토하는 것을 목적으로 한다. [연구방법] 본 연구는 2020년에서 2022년까지 거래소 및 코스닥시장에 상장된 기업을 대상으로 주기적지정 전후의 감사품질 변동을 회귀분석하였다. [연구결과] 주기적지정제도에 따라 감사인이 변경된 기업의 감사품질은 유의하게 제고되었으며, 이러한 효과는 시간당 보수가 증가할수록 강화되었다. 이는 감사인 지정으로 숙련도높은 감사인이 투입되는 경우 지정제도의 효과가 강화됨을 시사한다. 이러한 효과는 대형회계법인 또는 중소형회계법인 내에서 변경되거나 대형회계법인에서 중소형 회계법인으로 변경되는 경우에만 나타났다. [연구의 시사점] 최근 주기적지정에 대한 효과에 대한 의견이 엇갈리면서 주기적지정제도의 개선 필요성이 제기되고 있다. 이러한 상황에서 본 연구결과는 감사인 지정 이후 감사품질에 영향을 미치는 요소를 제시함으로써 규제당국에 시사점을 제시한다.

경제적 불확실성이 연구개발비 회계처리와 연구개발비 지출의 기업가치 관련성에 미치는 영향

김재은,정주렴 한국세무회계학회 2023 세무회계연구 Vol.- No.78

[Purpose] Even under economic uncertainty, research and development (R&D) investment is one of the main sources of corporate survival and success. However it is possible that management’s subjective judgment is involved in the R&D accounting treatment. Therefore it’s important to identify whether managers has made reasonable decisions, especially under economic uncertainty. This study tries to identify whether managers utilize R&D accounting as a means of profit adjustment, when economic uncertainty increases, and also how R&D expenditure affects firm value relevance in the midst of economic uncertainty. [Methodology] We conduct an empirical analysis of firms listed on the securities and KOSDAQ markets from 2001 to 2021. We use WUI to measure economic uncertainty, which is calculated by using text data by Ahir et al.(2018). [Findings] We find managers prefer to capitalized R&D when economic uncertainty increases. Also, investors perceive expensed R&D negatively in the midst of economic uncertainty, and capitalized R&D has no significant impact on stock market. This result is robust when we use dummy variable based on median value of WUI. We then divide the sample into R&D investment above 0.01%, 0.1% and 0.5% of total capital, and find that investors also react negatively to R&D capitalization in samples with R&D investment more than 0.5% of capital. [Implication] This study contributes the literature and regulators by identifying the effect of economic uncertainty on managers’ R&D accounting decision-making process and the effect of economic uncertainty on investors’ investment decisions on R&D expenditures. It also help investors on future investment decisions regarding to the R&D expenditure. [연구목적] 최근 COVID-19 전염병 대유행 및 러시아-우크라이나 전쟁 등 대형 위기가갑작스럽게 발생하고 산업환경도 급변하면서 미래를 예측하기 어려운 경제적 불확실성이 커지고 있다. 이러한 환경 속에서 기업의 적절한 연구개발 투자는 장기적인 기업의 생존 및 성공의 주요 원천 중 하나이다. 그러나 연구개발비는 투자결정 및 회계처리에 있어서 경영자의 주관적인 판단이 개입될 가능성이 존재한다. 이에 경영자가 기업 경영을 위한 장기적인관점에서 연구개발비를 합리적으로 의사결정하였는지 식별하는 것은 경제적 불확실성이 높아지는 상황 하에서 더욱 중요하다. [연구방법] 본 연구는 Ahir et al.(2018)이 제시한 WUI 지수를 활용하여 경제적 불확실성이증가하는 상황에서 경영자의 연구개발비 회계처리 및 이에 대한 시장 반응을 조사하였다. [연구결과] 2001년부터 2021년까지 국내 상장기업을 대상으로 분석한 결과, 경제적 불확실성이 커질수록 연구개발비 자본화 회계처리가 증가하는 것으로 나타났다. 또한 경제적 불확실성 속에서 투자자들은 연구개발비 비용화 회계처리를 부정적으로 인식하며, 연구개발비집중도가 커질수록 자본화 회계처리 역시 부정적으로 인식하는 것으로 나타났다. [연구의 시사점] 본 연구는 최근 더욱 커지고 있는 경제적 불확실성이 경영자의 연구개발비 회계처리 의사결정 과정 및 연구개발비 지출에 대한 자본시장 반응에 미치는 영향을 확인하였다는 점에서 공헌도가 있으며, 투자자 및 정책기관의 투자 의사 결정과 정책 수립 방향에 도움이 될 것으로 기대한다.

이사책임경감조항 도입 기업의 특성

김범준,정주렴,권세원 한국공인회계사회 2018 회계·세무와 감사 연구 Vol.60 No.1

In 2012, The Korean Ministry of Justice revised the Commercial Law to support firms in rapidly changing business environment. As part of revision, director’s liability limitation provision(LLP, hereafter) is newly introduced which limit director’s personal liability up to 6 times(3 times for outside director) of his/her annual salary and accordingly protect directors from personal indemnification for business decision. The Korean Ministry of Justice announced that this provision is included for the firms to hire capable managers more easily and promote proactive investment activities. Consequently, more than half of firms listed in Korean Stock Exchange adopted the LLP. However, critics argue that the LLP, by reducing management’s responsibility, would enhance managerial entrenchment and deprive investors and creditors’ benefit. In some firms it actually happens that the proposals to adopt LLP is rejected by institutional investor or some minor/foreign investors. Therefore, it would be worthwhile to empirically study whether the purpose of adoption LLP is achieved. In this paper, we try to address this issue by investigating firm characteristics of adopting director’s liability limitation provision. We use the 889 samples listed in Korean Stock Exchange for the period of 2012 to 2013. The empirical results are summarized as follows. First, the firms with lower growth potential, measured by market to book ratio, and higher stock return volatility are more likely to adopt the LLP. This result suggest the possibility that the management try to adopt LLP to avoid potential shareholder lawsuit, when they expect low performance and high stock volatility. Second, the firm tend to adopt the LLP more when the controlling owner is member of board of director or have higher ownership. This suggests that when the controlling owner has high responsibility, he/she tends to try to adopt the LLP. Lastly, the firms with less outside director and more frequent board meeting adopt the LLP more, which suggest that the deteriorated governance and lots of issues to be discussed positively affect the decision to adopt the LLP. Overall, the results of our study imply that the management tends to adopt the LLP to avoid potential personal liability rather than to recruit capable managers or more proactively involve in investment for future growth as the regulatory board expected. Our study contributes to literature, regulatory board and investors. First, even though LLP can highly affect the management behaviour, few studies except Yum et al. (2014) investigate how the LLP is implemented. This study extend Yum et al. (2014) by rigorously studying the motives of LLP adoption. Second, we suggest policy implication by providing evidence that LLP may be utilized as management’s opportunistic purpose, rather than as the regulatory board expected. Third, the investors may adjust the investment decision or propose the opinion in shareholders’ general meeting by understanding the characteristics of firms adopting the LLP. 본 연구는 개정된 상법에 따라서 정관에 도입이 가능해진 이사책임경감조항의 도입 유인을 분석하였다. 개정 상법은 주주에 대한 이사의 책임을 일정 금액 이내로 제한함으로써 유능한 이사를 쉽게 영입하고 이사의 진취적인 경영을 독려하기 위하여 제정되었다. 그러나 반대로 해당 조항이 경영진의 책임을 경감시킴으로써 주주와 경영진간의 대리인 비용을 증가시키고 경영진의 사적 이익을 위해 사용될 수 있다는 우려도 제시되고 있다. 본 연구에서는 이사책임경감조항을 도입한 기업 특성을 분석함으로써 이 문제를 실증적으로 검토하고자 하였다. 분석 결과, 성장잠재력이 낮고 주가변동성이 높은 기업일수록, 지배주주가 등기이사로 등재되어 있을수록, 지배주주의 지분율이 클수록, 사외이사 비중이 낮고 이사회 횟수가 많을수록 이사책임경감조항을 더 도입하는 것으로 나타났다. 이러한 결과는 이사책임경감조항이 미래 성장을 위한 적극적 투자 목적보다는 경영진의 책임회피목적으로 도입되고 있을 가능성을 시사하고 있다. 본 연구는 이사책임경감조항이 법 제정 의도와는 달리 기회주의적인 의도로 사용될 가능성을 제시함으로써 규제기관에 시사점을 제시하고 있다.

회계사 전문성 교육이 감사품질을 높이는가?

박현영,정주렴,장금주,강민정 한국회계학회 2019 회계저널 Vol.28 No.2

The education standard set by the Korean institute of Certified Public Accountants (KICPA hereafter) regulates regular certified public accountants (CPA hereafter) members to complete 40 hours of continuing professional education for accountants(CPE hereafter) every year, including mandatory 4 hours in accounting and 8 hours in ethics. This compulsory education is regulated for professional accountants to maintain their professional knowledge and ethics, as well as to learn new methodology if necessary. However, there are concerns that the aggregated CPE curriculum, which is uniformly constructed, may not be effective. This paper investigates the association between CPE and audit quality. This study uses 2015-2017 CPE data of small and medium accounting firms provided by KICPA. The results are summarized as follows. First, on average, CPEs are not significantly associated with audit quality measured as performance matched discretionary accruals. However, in case that the education hours less than 40 hours are larger than median, audit quality is deteriorated. Second, CPEs in accounting and audit area are effective in enhancing audit quality, while CPEs in ethics, non-audit services, and laws are not. Third, the CPEs constructed by audit firm for their own members are more effective than aggregated CPEs in bigger audit firm. Overall, these results imply that the contents of CPEs are critical to enhance the audit quality. These findings contribute to the literature by suggesting comprehensive evidence that CPE affects the audit quality, while prior literature suggests CPA survey or audit partner level result. This study also provides valuable implication for regulators and audit firms. 현재 공인회계사회에서 제정한 연수규정에 따르면 개업회계사는 회계 4시간과 직업 윤리 8시간을 포함하여 매년 40시간 이상의 교육을 이수하여야 한다. 이러한 의무 교육 조 항은 회계사를 대상으로 한 지속적인 전문성 교육을 통해 전문지식 및 직업윤리 인식을 제 고함으로써 감사품질을 향상시킬 수 있다는 전제를 바탕으로 하고 있다. 그러나 현업에서 는 일괄적인 의무교육이 전문성 개발 및 직업윤리 의식에 실무적으로 도움이 되는지에 대 한 의문을 제기하고 있으며, 상당수의 회계사들이 필수 이수시간을 채우지 않고 있는 실정 이다. 따라서 현재 수행되고 있는 회계사 대상 전문성 교육이 감사품질 제고에 도움이 되 는지를 검토할 필요성이 있다. 본 연구는 2015년부터 2017년까지 중소회계법인에 속한 회계사를 대상으로 전문성 교육이 감사품질에 유의한 영향을 미치는지, 그리고 어떠한 내 용 및 형태로 제공되는 교육이 더욱 효과적인지에 대해 분석하였다. 그 결과 첫째, 총 교육 시간은 감사품질과 유의한 관련성을 보이지 않았으나, 교육 미이수시간이 상대적으로 높은 경우 감사품질을 저해하는 것으로 나타났다. 둘째, 교육 내용을 구분하여 검토한 결과 회계 및 감사에 대한 교육과 감사품질은 유의한 양의 관계를 보이지만 직업윤리, 비감사서비스 및 법률에 대한 교육은 유의한 결과를 보이지 않았다. 마지막으로 상대적으로 규모가 큰 법인의 경우 자체적으로 실시하는 교육이 감사품질을 유의하게 높이는 것으로 나타나, 해 당 법인의 실정에 맞게 잘 구성된 교육의 경우 더욱 효과적인 것으로 보고하였다. 본 연구 는 실제 업무를 수행하는 개별 회계사를 대상으로 하는 교육의 효과를 분석한 최초의 연구 라는 점에서 공헌점을 가진다. 또한 회계사를 대상으로 하는 의무 교육은 감사품질 제고를 위해 필수적이지만, 그 내용에 있어서 목적 및 상황에 맞게 조정할 필요성을 제시함으로써 회계관련 유관기관 및 회계법인에 시사점을 제시한다.

기업의 정보비대칭이 감사시간 및 감사보수에 미치는 영향

조은정,정주렴 한국회계정보학회 2018 한국회계정보학회 학술대회발표집 Vol.2018 No.1

We investigate whether the information asymmetry is associated with external audit effort, measured by audit hour and audit fee. Information asymmetry increases when the manager tries to hide private information or provide low quality informationl Therefore, the magnitude of information asymmetry depends on the manager s willness to share inside information or the firma s information environment. As auditors perform audit procedure based on documents provided by the firm, the level and extent of information sharing with auditor cna affect audit procedure. The firms with high information asymmetry limit both quantity and quality of information to stakeholders, and this attitude is more likely to maintain in external audit process. In this case, auditor would assess the audit risk as high and put more effort to collect other evidences to assure minimum level of audit quality through various channels. This will results in lower audit efficiency and more audit effort, proxied by higher audit hour. At the same time, if auditor cannot conduct the audit procedure properly due to the limited information, the possibility of undetected misstatement or error becomes higher. This leads to higher audit risk, and the increase in both audit hour and audit risk will result in higher audit fee. Therefore, we hypothesize that information asymmetry increases both audit hour and audit fee. Using the sample of 9,180 firm-year from 2002 to 2010 listed in KSE or KOSDAQ. we empirically find that information asymmetry. proxied by standard deviation of daily stock return and stock transaction volume turnover, increase audit hour and audit fee. For robustness, we control for the accounting quality effect which may impact the information asymmetry and audit fee and audit hour at the same time, and the result is qualitatively the same. We additonally test using 2-stage OLS model to mitigate possible endogeneity issue, and the result still holds. Prior studies on information asymmetry mostly focus on the association with firm value, stock market or accounting quality. Few studies investigate the impact on audit procedure or audit risk. Our results extends information asymmetry related research by examining its impact on audit procedure. In addition, unlike quite a number of prior studies which use the audit fee and audit hour as proxy for audit quality, our results suggest that the audit fee and audit hour increases due to the inefficiency of audit procedure or high audit risk. It implies that meaning of audit hour and audit fee should be cautiously interpreted other than higher audit quality.