ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

Audit Quality of External Audits and Internal Audits in Industry－academia Cooperation Foundation

  • kim kyungmin Korea Advancing Schools Foundation
  • CHOI, JEONGUN Daegu University

Asian Tax Journal Vol. 23 No. 6 (2022), pp. 205-226

Abstract

The purpose of this study is to investigate the relationship between the size of external auditor (Big4) and internal audit expertise (CPA) of the Industry－Academic Cooperation Group, and audit quality. Accordingly, discretionary accruals (Dechow et al. 1995) was used as a proxy of the Industry－Academic Cooperation Group (ICG). The results are as follows. There was no significant relationship between the size of external auditor (Big4) of the Industry－Academic Cooperation Group and discretionary accruals (DA). This suggests the need to prepare some system to improve the audit quality of the ICG external auditor. Second, internal audit expertise (CPA) and discretionary accruals was negative relationship significantly. Currently, there is no compulsory requirement for internal auditors to be CPAs in the related regulations of the ICG. However, the ICG is working to improve the audit quality by using experts with CPAs as internal auditors. Therefore, it may be possible to consider a method of assigning the internal audit of the ICG to account experts such as CPAs. This study has a contribution to empirically analyzing the relationship between the size of external auditor (Big4) and internal audit expertise (CPA) of the ICG, and audit quality. Therefore, this empirical result provides useful information to the ICG and policy makers.

Keywords

  • Industry－Academic Cooperation Group
  • audit quality
  • Discretionary accruals
  • external auditors
  • internal auditors

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Asian Tax Journal

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