• Journal of Korean Society for Quality Management
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• v.50 no.4
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• pp.735-749
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• 2022

Purpose: The purpose of this study is to investigate whether the Management Discussion and Analysis (MD&A) has an impact on auditors' audit efforts. MD&A is a means of disclosure that provides information about a company from the management's perspective in financial reporting. The MD&A is a standardized format of nonfinancial information that can be useful for the stake-holders. The auditors have incentives to utilize the nonfinancial information contained in the MD&A for their decision-making. We posit that the MD&A disclosure quality is associated with the level of audit efforts. Methods: We hand-collect the disclosure data from the Financial Supervisory Service of Korea (the Korean SEC). Results: By employing two measures of audit efforts, we document evidence that the quality of MD&A is associated with both audit hours and audit fees. Conclusion: It implies that the auditors perform intensive audit work for companies with high-quality disclosure of MD&A. The study contributes to the literature by providing the first approach to examine the association between the MD&A disclosure and audit efforts.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.831-843
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• 2020

The objective of this study is to examine the effects of audit socialization and professional commitment on professional success of tax auditors in Thailand through individual learning as the moderator. The specific research questions are: (1) How audit socialization affects professional commitment, (2) How professional commitment influences professional success, and (3) How individual learning moderates the audit socialization-professional commitment relationships, the audit socialization-professional success relationships, and the professional commitment-professional success relationships. This study collected data from 249 tax auditors in Thailand by using questionnaire. To investigate the research relationships, both structural equation model and multiple regression analysis are implemented. Within the research results, audit socialization has a significant positive effect on professional commitment and professional success while professional commitment has an important positive influence on professional success. Similarly, individual learning positively moderates the professional commitment-professional success relationships. In summary, audit socialization is important for auditing professions and it is a key determinant of professional success. Thus, auditors need to pay attention to audit socialization through learning and understanding it and applying its concepts to audit works to increase auditors' professional success, continuous survival and long-term sustainability.

• Journal of Korea Ship Safrty Technology Authority
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• s.32
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• pp.57-71
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• 2012

Recently, the navigation risk is increasing significantly with growing of vessels' volume and propelling marine facilities, water bridges and port development etc. At this point of time, the Ministry of Land, Transport, and Maritime Affairs introduced the Maritime Safety Audit(MSA) in amendment of the Korea Marine Traffic Law. audit results were survey for the last two years. As a result, appropriate certificate appears 11% among audit report, is an urgent need for improved quality of audit reports. This study is aimed to propose about Audit Personnel Education & Training System. To these solve, this paper analyzed the tendency of Audit Personnel Training. And also the opinions of user and experts were investigated and analyzed using Questionnaire survey methods. As a result, this paper was suggested, the construction of Audit Personnel Training System and the curriculum and training contents for 5-days of basic course, 2-days of expert course, 3-days of Qualification Maintain course.

• Journal of Information Technology Services
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• v.11 no.4
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• pp.107-121
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• 2012

The core infra-technology in the ubiquitous era, RFID which has taken action from the public institution with the pilot projects as well as the practical projects is gradually extending its spectrum to the private enterprises. Along with its expansion, the audit required on the RFID-based information system is also growing in the industry. Especially, since RFID-based information systems, especially compared to other information systems, are likely to be exposed to many threats, the security audit for them is being emphasized. This paper suggests security audit checking items for the RFID-based information system, which can be used to perform the efficient security audit. The security audit checking items consist of eight basic checking items, each of which consists of detailed review items and can be applied for each building steps of the system(analysis, design, implementation, testing, and development). Finally, this paper confirmed the efficiency of the security audit checking items proposed in this paper through survey by the experienced auditors and analysis of practical audit cases.

• Journal of Information Technology Services
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• v.5 no.3
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• pp.121-135
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• 2006

With the growth and maturation of IT industry, the necessity of audit about development, maintenance and management of high-quality information system is gradually increasing. In addition, the necessity of inner auditing system, which could totally verify and evaluate the effectiveness of project according to the characteristics of organization conducting information-oriented business, also being proposed. Government offices including Korea Institute of Science and Technology(KISTI) collectively controlling nationwide science-technology related information have no guiding principle or organization within themselves even though performing information-oriented businesses are becoming more bigger and complicated. In this paper, we propose scheme for devising framework, which can audit construction and operation of knowledge information, check list and guideline. In addition, we present concrete ways for adapting these schemes to institutes which manage science-technology knowledge information. Audit framework consists of points of time in audit, audit domain and audit criterion. Points of time in audit are defined as three phases as followings: pre-audit, in-progress audit and post-audit. Audit domain includes 16 detail audit domains and especially we set 11 check items and 40 detail investigation items for database implementation business. We expect that management level of science-technology implementation business of organizations using this research result will increase and they could offer high-quality information service.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.7
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• pp.525-532
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• 2021

This study examines the association between a firm's business strategy and audit report lags. This study employs 5,072 firm-year observations from 2015 to 2019. Our sample comprises all of the firms listed on the Korea Composite Stock Price Index (KOSPI) market and Korea Securities Dealers Automated Quotation (KOSDAQ). We perform OLS regression analysis to test our hypothesis. The OLS regression analysis was conducted through the SAS and STATA programs. We find that business strategy is positively associated with audit report lags. Especially, we find that defender firms are negatively associated with audit report lags. The findings of this study suggest that prospector-like firms would increase their performance uncertainty as well as audit risk. Therefore, prospector-like firms interfere with the efficient audit procedures of auditors. On the other hand, our findings indicate that defender-like firms would decrease their performance uncertainty as well as an audit risk because they focus on simple product lines and cost-efficiency. For this reason, auditors will be able to carry out the audit procedures much more easily. Our results present that a prospector-like business strategy degrades audit effectiveness as it exacerbates a company's financial risk, willingness to accept uncertainty, and the complexity of organizational structure.

• Asia-Pacific Journal of Business
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• v.11 no.3
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• pp.123-136
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• 2020

Purpose - This study is to verify the impact of the documentation of key audit matters on the value relevance of accounting information in accordance with the revised accounting audit standards in 2017. Investors will be able to identify the company's significant financial risks through key audit matters and use them to make investment decisions. Design/methodology/approach - From 2011 to 2019, the final sample is 290, based on the December settlement of accounts listed on the securities market. Ohlson (1995) was used to verify the incremental link between net income and the book value as a determinant of corporate value. Findings - First, the key audit matters in the financial industry was found to have a negative (-) effect that was significant to the value relevance of accounting Information. In addition, the value of the interaction between the key audit matters and the net income is a significant (+) relationship with the share price and the value of the interaction between the key audit matters and the book value is a significant (-) relationship with the share price. This means that the key audit matters is the determining factor of corporate value, positively reflects the accounting information in net income and negatively reflects the accounting information in book value. Second, among the key audit matters, the fair value assessment of financial instruments and the adequacy of premiums reserve have a significant impact on the value relevance of accounting information. Research implications or Originality - The results of this study suggest that investors recognize key audit matters as information about the company's major financial risks and reflect them differently in the value relevance of accounting information.

• Journal of East Asia Management
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• v.4 no.1
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• pp.23-51
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• 2023

We investigate whether the association between management overconfident tone and the level of audit effort measured by audit fees and hours differs depending on the level of earnings management. Prior studies suggest that firms led by overconfident managers are likely to initiate risky investments, report low quality financial statements, and have material weaknesses in internal control system. These characteristics, combined together, result in higher audit risk. At the same time, auditors assess audit risk based on the quality of financial reporting, measured by level of earnings management. As a result, the assess audit risk is likely to reflect the combined effect of management overconfidence and the level of earnings management. In this paper, we investigate whether auditors differentiate the effects of real earnings management (REM) and accrual-based earnings management (AEM) when they assess the audit risk related management overconfident. Using the CEO's letter published in 2018, we measure the CEO's tone representing the degree of overconfidence (i.e., activity). Based on this measure, we find that the positive association between managerial overconfident tone and audit effort is more pronounced as the level of REM is higher. However, we find that the baseline association does not vary depending on the level of AEM. These results suggest that auditors consider the managerial overconfident severer when such characteristic accompany the higher level of REM, which can be outcome of aggressive business decisions possibly leading to the higher audit risks. We further find that these results are stronger for Big 4 auditors and continuing auditors. This paper contributes to the literature and practice as follows. First, we provide contextual evidence on how auditors reflect managerial characteristics in the audit process by documenting that auditors actively increase their audit efforts only when overconfident managerial characteristics are highly likely to lead to audit risk. This result suggests that auditors conduct external auditing considering both the efficiency and effectiveness of the audit process. Second, we suggest that auditors use information obtained from a wide range of sources to identify audit risks. Our results provide evidence of how the auditing standards, which do not provide detailed guidelines for audit risk assessment, are being applied in practice. Finally, our results also enhance the understanding of how audit fees are determined. Combined with the studies related to audit pricing, we provide the important reference for discussion between the auditor and the auditee about the audit fee that has created acute tension after the enforcement of the new External Audit Act.

• Journal of the Korea Society of Computer and Information
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• v.17 no.4
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• pp.173-184
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• 2012

As a result of the compulsory of information system audit and a rise in audit demand, the quality improvement of information system audit is being emphasized. However, since the current information system audit heavily depends on the auditor's experience, skill, and subjective judgments, it incurs distrust in the objectivity and reliability of audit results from audit interest person. Furthermore, so far research activities aimed at securing the objectivity and reliability of audits have not been adequately carried out. Therefore, this paper presents a quantitative method for information system audit evaluation in order to contribute to the quality improvement of overall information system audit through securing compliance, objectivity, and reliability of information system audit. The quantitative method is largely composed of two sectors, such as evaluation areas and items, scores calculation for evaluation items, and can generally apply the information system audit standard to information system audit evaluation.

• Journal of Digital Convergence
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• v.10 no.9
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• pp.123-136
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• 2012

Web applications are widely used by the development of the Internet, but there are no separate audit model for a web-based information systems. Information business has a wide variety of characteristics. So, web-based information system audit model is needed. Therefore, a web-based information system audit model was proposed to enhance the effectiveness of audit and to increase the quality. Audit check lists were applied based on three sets of existing information audit check framework. An audit point of time was defined as analysis, design, and implementation. An audit domain was defined as contents, design, and process. Moreover, audit viewpoint and inspection standards were defined by setting standards of process, product, and performance. Moreover, this paper proposes differences between an existing model of information system development methodology and web-based information system. It also deduced audit checklists according to audit domains for web-based information system audit. The deduced audit checklists were verified for its suitability by conducting surveys, and the modified audit inspection model, in which the deduced audit checklists were applied, was proposed.