Internal Control Managers’ Accounting Experiences on Audit Quality—Focus on ESG

Suyon Kim ()
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Suyon Kim: Department of Accounting, College of Commerce, Jeonbuk National University, Jeonju 54896, Republic of Korea

IJFS, 2023, vol. 11, issue 2, 1-14

Abstract: The purpose of this research is to investigate whether internal control (IC) managers’ experience in accounting influences audit quality, employing a regression analysis by utilizing a novel dataset of Korean firms from 2018 to 2020. According to the findings, IC managers who have a deeper understanding of accounting or more expertise in the field have a positive impact on audit quality. Nuancing this link between the accounting-specific experiences of IC managers and audit quality, the study examines how ESG investment impacts the relationship between IC managers’ accounting-related experiences and audit quality. The result confirms that the negative effect of low ESG investment on a firm’s sustainability is reduced when IC managers are with strong accounting competency. In other words, in a circumstance in which a company’s audit risk is high due to insufficient ESG investments, IC managers’s high degree of accounting proficiency cope with audit risk to increase audit quality. Additionally, by analyzing a dataset recently obtained from Korea that assesses the level of accounting expertise possessed by IC managers, it has become evident that this experience plays a key role in the process of improving audit quality. These findings imply that policymakers’ and standard setters’ efforts to promote high-quality audits should be coordinated with IC managers’ accounting experiences.

Keywords: internal control managers’ accounting-specific experiences; audit quality; ESG (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2023
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