ABC테크 회계부정에 관한 사례연구

허진숙 ( Jin Suk Heo ),정경철 ( Kyoung Chol Jung ),마희영 ( Hee Young Ma ) 한국회계학회 2015 회계저널 Vol.24 No.4

This paper explores an accounting fraud case of ABC Tech. Its frauds were mainly related with overreporting accounts receivables and booking unreasonable accounting estimate for allowance for bad debt. Although these fraud techniques are typical and well known to the auditors, theses fraud schemes were successful for several years. Thus, we investigate how accounting information was manipulated by the company and why these frauds were not discovered through regular internal and external audit procedures. And we discuss whether outside investors could detect these fraudulent manipulation in advance. ABC Tech is a car diagnostic scanner company established in 1990. Its business was successful along with booming of high tech cars with expensive and complex electronic systems and they went public in 1999. But its new multimedia business failure in 2001 made the company hard to maintain the minimum requirement to remain listed. After all, the company manipulated financial statements under financial pressure. First, they report fictitious accounts receivables after receiving money from the customer to inflate its receivables. Second, the company understated the allowance for doubtful accounts to decrease expenses. In 2008, FSS(Financial Supervisory Service)``s inspection revealed that financial statements were manipulated by the company. In this paper, we analyse this fraud case from various points of view. As various information such as financial information, management information and important business environment change etc, is freely available to the public via DART system(Korea``s equivalent to EDGAR), we conduct detailed examinations of the company``s accounting information and business environment analysis. First, we explain the accounting fraud schemes and calculate its effects on financial statements. We also suggest adjusting journal entries and correct financial statements. This procedures reveal the company``s intention to meet the listing requirement. Thus this analysis shows the whole picture of fraud structure and financial consequence of the financial manipulation. Second, the company``s disclosures are thoroughly examined. Especially non-financial disclosures are investigated. They showed typical warning signs that the company might be fraudulent. The company reported unusual related party disclosures and invested in the companies which are not related with their business. And the CEO and CFO were changed without reasonable explanation. They conducted small amount of seasoned public offerings frequently which showed the lack of cash flows. Third, we conduct basic financial ratio analysis. The profitability, solvency, liquidity and stability of the firm are investigated. This procedure shows that the company``s business was getting worse in profitability and solvency. And we find that accounts receivables turn over ratio was dropped sharply. This implies that there might be a problem in the timely collection of accounts receivables. Fourth, we investigate auditors`` audit procedures were reasonable. We obtain a FSS investigation report about the audit firm``s audit procedures related with the company``s fraud. This report shows that auditor``s procedures were not enough to find out the company``s fraud. We also compare the audit hour and audit fee of the company with the average figures of matched firms. As a result, the company``s audit fee was higher than the average but the audit hour was lower than the average. Based on these findings, we try to show how accounting information is useful for investors to detect signs of insolvency in the firm. Especially, accounting information users need to know the limitations of audited reports and financial statements. We believe that this case provides a good example to learn how the accounting fraud works and how to find it.

낙수효과 및 동반성장정책이 대기업 협력사의 이익조정에 미치는 영향

허진숙(Jin Suk Heo),권수영(Soo Young Kwon) 한국경영학회 2017 경영학연구 Vol.46 No.6

지속가능경영보고서와 신용등급 불일치의 관계 및 환경등급의 조절효과 분석

김인중(Injoong Kim),허진숙(Jin Suk Heo),김수인(Su-In Kim) 한국국제회계학회 2024 국제회계연구 Vol.- No.113

[연구목적] 본 연구에서는 지속가능경영보고서의 발간과 정보 비대칭의 관계를 분석하고, 기업의 환경등급 수준에 따라 이 관계가 다르게 나타나는지 검증해보고자 한다 [연구방법] 분석을 위해 2020년에서 2022년까지 ESG 등급을 받은 코스피 상장법인 중 두 개 이상의 회사채 발행 신용등급을 받은 기업을 대상으로 지속가능경영보고서의 발간과 신용등급 불일치의 관계 및 환경등급이 이 관계에 미치는 조절효과를 검증한다. 이를 위해 본 연구에서는 표본 기업이 신용평가회사로부터 받은 회사채 신용등급을 사용하여 로짓분석을 실시하고, 지속가능경 영보고서 발간 기업의 특성에 대한 내생성을 통제하기 위해 성향점수매칭 방법을 사용한다.<BR/>[연구결과] 분석 결과, 지속가능경영보고서 발간과 신용등급 불일치는 유의한 음(-)의 관계를 가지며, 이 관계는 기업의 환경등급이 낮을수록 강화되는 것으로 나타났다. 지속가능경영보고서 발간 여부를 기준으로 표본수를 성향점수매칭한 후의 분석 결과도 유사하게 나타났다.<BR/>[연구의 시사점] 본 연구는 지속가능경영보고서와 정보 비대칭의 관계를 분석하고, 환경등급에 따라 이 관계가 차별적으로 나타나는지를 분석하여 환경 관련 지속가능성 정보 공시가 신용위험 측면의 정보 비대칭성에 영향을 미칠 수 있다는 결과를 보여주었다. 또한 본 연구의 주제는 지속가능성 공시 의무화가 추진되고, 기후변화 위험의 중요성이 커지는 현 상황에서 시의적절하다. [Purpose] This study aims to investigate the effect of disclosure of sustainability report on credit rating disagreement and the moderating effect of environmental rating on the relationship between disclosure of sustainability report and credit rating disagreement.<BR/>[Methodology] We test the relationship between disclosure of sustainability report and credit rating disagreement and the moderating effect of environmental rating on this relationship for companies listed on the KOSPI market from 2020 to 2022 which have ESG rating and two or more credit ratings. We use logit analysis and propensity score matching method to control endogeneity that may exist between the disclosure of sustainability report and the credit rating disagreement of the company.<BR/>[Findings] We find that the negative relationship between the disclosure of sustainability report and the credit rating disagreement and the positive moderating effect of environmental rating on this relationship. The results of propensity score matching based on the disclosure of sustainability report are similar.<BR/>[Implications] This study expands the scope of literature of voluntary disclosure of the company explaining the impact of the disclosure of sustainability report on credit rating disagreement based on environmental ratings. In addition, This study has a contribution in the current situation where mandatory disclosure of sustainability reports is being promoted and climate risk becomes more important.

감사노력이 계속감사기간과 이익의 질의 관계에 미치는 영향

권수영 ( Soo Young Kwon ),기은선 ( Eun Sun Ki ),허진숙 ( Jin Suk Heo ) 한국회계학회 2012 회계학연구 Vol.37 No.4

This study examines whether the adverse effect of auditor short tenure on earnings quality is mitigated when auditors spend audit hours over and above the normal level of audit hours. Prior studies show that auditors with short tenure are associated with lower earnings quality because of the lack of client-specific knowledge (Johnson et al., 2002; Myers et al., 2003; Ghosh and Moon, 2005). The reason for this result is that it takes time for auditors to acquire knowledge about their clients` business. But, if auditors make additional efforts by spending abnormal audit hours, then auditors with short audit tenure may be able to make up their lack of knowledge about their clients, mitigating the adverse effect of short auditor tenure on earnings quality. Meanwhile, this mitigating effect of extra audit effort can be affected by auditor`s size or industry specialization. On the one hand, as BIG 4 auditors have superior training programs and standardized audit methodologies, these factors may enable BIG4 auditors to better understand their new clients with relatively small efforts. Similarly, industry specialist auditors have accumulated experience and knowhow in serving other clients in the same industry, thus the audit efforts of industry specialists relative to non-specialists may be smaller that is necessary to understand new clients` characteristics. One the other hand, non-BIG4 or non-specialist auditors may need relatively more audit efforts to enhance the understanding of new clients due to system problems or lack of audit experience. If the audit efforts of non-BIG4 or non-specialist auditors in the early years of the audit engagement are enough not only to overcome lack o client-specific knowledge but also to make up for their deficiency in reputation or industry specialization, then the mitigating effect of extra audit effort can be observed even in the non-BIG4 or non-specialist auditors. Otherwise, it can be observed only when auditors are either BIG4 or industry specialists. It is the empirical question whether the audit efforts of non-BIG4 or non-specialist auditors are enough to mitigate the negative relation between short audit tenure and lower earnings quality. We build up the hypotheses as follows. We first test whether the negative relation between auditor tenure and discretionary accruals is attenuated when auditors make additional efforts. Second, we allow the interaction between Big 4 affiliation/industry specialization and audit hours to examine its effect on the negative relation between auditor tenure and discretionary accruals. To test these hypotheses, we use 9.518 firm-year observations with no missing data on audit hours and audit fees from the firms listed on Korea Stock Exchange and KOSDAQ for the period 2003~2010. We employ discretionary accruals estimated by the Kothari et al. model as a proxy for earnings quality. Abnormal audit hours are measured by the difference between actual audit hours and the expected audit hours estimated from the audit hour model. The positive audit hours implies that auditors make additional effort than expected, controlling for clients` business complexities and audit risk. The results of this study show that the negative relation between auditor tenure and discretionary accruals is weakened when firms are audited by either Big 4 or industry specialist auditor and auditors make additional effort. This indicates that the relation between auditor short tenure and the impairment of audit quality is mitigated when client firms are audited by either Big 4 auditors or industry specialist auditors and/or auditors make extra effort. But, the mitigating effect of extra audit effort on the relation between auditor short tenure and the impairment of audit quality is only observed when auditors are Big 4 auditors or industry specialist auditors. This suggests that the deterioration of audit quality due to auditor short tenure is attenuated by auditor reputation and industry specialization, not by auditors` spontaneous audit effort.

로우볼링 결정요인

권수영 ( Soo Young Kwon ),정경철(교신저자) ( Kyoung Chol Jung ),허진숙(공동저자) ( Jin Suk Heo ) 한국회계학회 2016 회계학연구 Vol.41 No.2

Low-balling is the loss-leading practice of setting audit fees below total current costs during initial audit engagements to better compete for large and prestigious clients (DeAngelo 1981). Legislators, regulators and practitioners have raised concerns about low balling for a long time due to the prevalence of auditors’ initial-year audit fee cutting practices in Korea to obtain new audit engagements. For example, Hyundai Mipo Dockyard Company and Hyundai Samho Heavy Industries Company switched their new auditors in 2014 and paid lower audit fees lower than those they previously paid to old auditors by around 43%. While an auditor incurs a loss in the initial audit engagement due to the discounted audit fees, the auditor may view the client primarily as a future income stream. Thus, the concern is the combination of pricing and tenure where an auditor must retain a client to recoup costs and ultimately achieve profitability. Korean regulatory authorities can designate external auditors for firms with quite low audit fees because of auditor independence concerns. But none of the two companies’ auditors have been designated for the practices of aggressive audit fee cutting. The purpose of this paper is to understand the determinants of low-balling, defined as audit pricing below audit cost in the first-year. Prior research has focused on initial-year audit fee cutting rather than low balling because audit cost data is not available. We analyze annual reports of Big 4 accounting firms in Korea and find that operating income over sales is around 2.91% on average and net income over sales is around 1.36%. We also break labor costs into fixed and variable costs because low-balling decision by auditors can be made based on variable costs. Through these analyses, we assume that the average percentage of contribution margin is around 18%. Based on this estimate, we operationalize low-balling by assuming that low-balling exists if an audit fee is less than the expected audit fee by 20 percent or more. We also employ alternative cutoffs such as 15% and 25% to define low-balling as sensitivity checks. And then, we consider the economic factors of low-balling, such as auditor concentration ratio, auditor industry specialization, auditor turnover, non-audit service fees, auditees’ risk and client importance. Based on panel datasets of audit fee disclosures from 2003 to 2014, our empirical results provide evidence that auditors tend to low-ball if clients are large. This result could be due to the fact that an auditor has no room for audit fee discounts for small clients companies since the auditor still has to follow mandatory audit procedures even for small firms Or an auditor is willing to provide audit fee discounts for large clients since they are in general less riskier than small clients. In contrast, auditors are less likely to low-ball if client importance is high, client business risk is high, or auditor turnover is high. These results show that non-price competition becomes important when a client is important, risky and has high auditor turnover history. We also find that auditors are more likely to low-ball for downward auditor changes, not horizontal changes. Upward auditor changes are related with low-balling when it is only compared to changes from a non-Big 4 auditor to a non-Big 4 auditor. The effect of auditor’s industry specialization on low-balling decisions depend on the cutoff points employed to define low-balling, indicating that the relationship between auditor specialization and low-balling may not be linear. We do not find evidence on the effects of auditor concentration, non-audit services and previous auditor tenure on low-balling. In additional analyses, we conduct the analyses by splitting the sample based on the type of auditor change. Low-balling is pronounced for the downward auditor change, while low-balling is observed only for the horizontal change between non-big auditors. We also show that the low-balling measures based on the cutoff percentages from prior-year audit fees may lead to the misclassification of low-balling engagements since audit fees can be affected by various factors such as client size, risk, and complexity. Our findings remain unchanged even after controlling the number of CPAs and listed companies and the ratio of the two numbers to ensure that the results of low balling determinants are not driven by the increase in the number of CPAs in Korea. We suggest that understanding low-balling determinants may provide useful information to regulators, practitioners, and financial statement users since low-balling is driven by auditors’ economic incentives, which may eventually affect audit quality.

통합보고(Integrated Reporting)의 현황과 기업보고서로의 당면과제 분석 -포스코 사례분석을 중심으로

권수영 ( Soo Young Kwon ),황유선 ( Yoo Sun Hwang ),허진숙 ( Jin Suk Heo ) 한국회계학회 2014 회계저널 Vol.23 No.6

International Integrated Reporting Council(IIRC) released International <IR> Framework on December 2013 for the purpose of providing potentional <IR> preparers with detailed guidelines and methods. In this study, we introduce the framework of International <IR>, explain six capitals and seven content elements, and summarize the papers in the integrated reporting literature. We also review POSCO``s integrated report to understand whether the integrated reporting is feasible and what the issues are in preparation of integrated reporting. Finally, we suggest the following aspects in order for integrated reporting to be settled as a business report: top managements’ commitment and continuous investment in integrated reporting, the balance between value creation and accountability, improvement in measures employed in integrated reporting, clarification of six capitals and seven content elements, assurance and legal liability associated with integrated report, and understanding of primary users`` needs.