ScholarWorks@숙명여자대학교

초록

There have been many changes in Korea since the adoption of principle-based accounting standards in 2011. Even though principle-based accounting has advantages such that it gives the management discretion to bring new economic events and better report the economic substance of the firms, it also has disadvantages such that it lacks specific guidelines for the application of the standards. Therefore, it is necessary to mitigate uncertainties in the application of the standards by reducing the differences of opinions among stakeholder groups. For this purpose, we identify through questionnaires the audit environment and practical audit problems changed from the adoption of principle-based accounting. We found that audit effort increased, whereas the audit fees per hour decreased. The litigation risk against auditors, the possibility of management's earnings manipulation, and thus the review time by the internal quality control department increased. In particular, auditors reported difficulties in determining de facto control and scope of consolidation, measuring unlisted stocks’ fair values, recognizing and measuring impairment losses, recognizing appropriate revenues, classifying re search expenses and development costs, and identifying debt from equity. Thi s study is expected to contribute to the successful establishment of principle-based accounting in Korea.

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