Study on <Audit Quality Improvement Effects by Implementing Regular Designated Auditing Systems>
Focusing on research results when implementing the ‘Regular Designated Auditing System’
[February 16, 2021]
<YU Department of Accounting and Taxation Professor Jung Gi-wi (right) and Dr. Lee Minwoo (left) who won the ‘Best Poster Award’ from the Korean Institute of Certified Public Accountants for their research on accounting taxation and auditing>
YU Department of Accounting and Taxation Professor Jung Gi-wi (40) and Dr. Lee Min-woo (35) received the ‘best poster award’ from the Korean Institute of Certified Public Accountants.
The Korean Institute of Certified Public Accountants selected three outstanding papers among those published in 2020 in the academic journal it publishes, <A Study on Accounting, Tax and Audits> in 2020. The study <Audit Quality Improvement Effects by Implementing Regular Designated Auditing Systems> (carried in volume 61 issue 4) published with YU Professor Jung Gi-wi and Dr. Lee Min-woo as co-authors received the grand prize.
The Korean Institute of Certified Public Accountants was established in 1954 and it is Korea’s top organization specializing in accounting and taxes in charge of enacting accounting audit standards and certified public accountant ethical standards, training for CPAs, and inspection of audit reports.
The awarded papers is a study that verified the feasibility on ‘regular designated auditing system’ that limits continued audit periods by the same auditor (accounting firm) of companies to six years. The ‘regular designated auditing system’ prescribes companies that autonomously appointed auditors for six years to receive audits from a designated auditor for the next three years to prevent collusion between the company being audited and auditor, while also enhancing reliability of the financial statement. And this was introduced in 2020 to revise laws.
Dr. Lee Min-woo said, “Through this study, we confirmed that there were significant changes in auditing quality for six-year continued audit periods,” and added, “It can be expected to have real effects in terms of preventing collusive relations between auditors and companies through the ‘regular designated auditing system’ that limits the continued audit period to six years.”
Professor Jung Gi-wi stated, “At this current juncture before implementing the ‘regular designated auditing system’ our research results are receiving attention,” while adding, “the results of this study can be referred to for financial authorities that revise and supplement accounting regulations and laws related to accounting firms that directly apply the ‘regular designated auditing system’ in actual work.
