ANALYSIS OF THE EFFECTIVENESS OF THE PERIODIC AUDITOR DESIGNATION SYSTEM

Abstract

The periodic auditor designation system was introduced to improve accounting transparency in Korea since 2019. There was a lot of opposition from companies being audited, and calls for its abolition continue to this day. Korean supervisory authorities are also concerned about whether the system will continue. The government was also concerned about the side effect of this system increasing audit fees without improving accounting quality, so it simultaneously promoted efforts to institutionally improve audit quality by introducing standard audit hours. Therefore, this study analyzes the effectiveness of the periodic auditor designation system whether it contributes to improving the accounting transparency of companies from the perspective of conservatism. We also examine the result of companies' perception of the periodic designation system by comparing changes in accounting transparency by year.