Detail The effects of auditors’ reputation and default risks on unethical usage of expenses in Korea   Oleh:  Kim, Sunghwan ; Pae, Sangshin ; Kim, Mina Jenis: Article from Proceeding Dalam koleksi: American Society of Business and Behavioral Sciences (ASBBS) Proceedings: Feb 2014; Vol. 21 (1), page 1-17. Fulltext: 38 - ASBBS 2014 - p407.pdf (638.97KB) Isi artikel In this study, we investigate the effects of a peculiar type of expenses in Korea, catering expenses, also known as entertainment costs, which are sometimes used as a barometer of unethical usage of expenses, to make best of illegal loopholes in manipulating taxable income and other discretionary usage in various business activities. We use firm level data for firms listed on and delisted from KOSPI during the period 1991 to 2007. From the study, we find that (1) the catering expenses, measured as a ratio to sales, do not have any statistically significant relationship with the reputation of auditors, proxied by big 4 auditing firms, which are the biggest in size and primarily associated with global auditing and consulting firms like Ernest Young, that (2) they increase with bad audit opinions, implying firms try hard to improve the results of audit using catering expenses, that (3) the predicted default risks increase the expenditure of the expense while the defaults actually incurred decrease such spending and that (4) the expenses increase with new auditors, implying that firms cater their auditors for better audit opinions. Thus, we can infer that firms in Korea might have used unethically expenses more when in distress financially and accounting audits. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Kembali

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