Abstract

The Act on External Audit has been revised as submitting unaudited financial statements to SEC to prevent the self-review threats and root out the auditor’s compilation services. The purpose is to enhance the internal accounting competence and eliminate the compilation services. The literature showed that the frequency of the adjustment on preliminary earnings has increased after adopting the act. For the weak evidence, we assessed the improvement of the internal accounting competence including financial statement compilation on its own and empirically examined the corporate governance if it affects the firm’s accounting competence. This paper suggests the followings. First, it proved that the firm's accounting competence improved and the auditor’s compilation services largely decreased from 2016. Second, the better corporate governance indicates the lower frequency of the preliminary earnings modification. These results are the empirical evidence of the act's effectiveness.

Keywords

• Mandatory submission of Unaudited Financial Statementsct
• Firm’s Accounting Competnecy
• the Adjustment on Preliminary Earnings

Related Articles

• Corporate Social Responsibility and Financial Statements Comparability

  Jeong-Taek Kim , Sang Hyuk Lee

  23(5) 161-181

  Abstract Full Text for PDF

• The Effects of the Change of Largest Shareholder on the Possibility of Error in Financial Statements

  Eun Joo， Cho , Jong Sung Park

  20(3) 77-103

  Abstract Full Text for PDF

• The improvement of auditing and disclosing for correction of prior period errors in financial statements

  Park, Jong-Seo

  20(1) 67-94

  Abstract Full Text for PDF

• Accounting System －Focusing on National University Hospitals－

  Kim, Ki-Ho , HYUNDONG KIM

  12(3) 9-51

  Abstract Full Text for PDF

• A Study on the Fulfillment of Company's Obligation on Preparing Financial Statements

  JEONGTAEBEOM

  11(4) 123-151

  Abstract Full Text for PDF