Title: The association between human resource investments in the internal accounting control system and non-audit fees: evidence from South Korea

Authors: Kook Jae Hwang; Pyung Kyung Kang; Dong Jin Jung

Addresses: Sogang Business School, Sogang University, Seoul, 04107, South Korea ' Sogang Business School, Sogang University, Seoul, 04107, South Korea ' Sogang Business School, Sogang University, Seoul, 04107, South Korea

Abstract: This study empirically examines the relationship between human resource investments in the internal accounting control system (IACS) and firms' non-audit fees. By using hand-collected data on the IACS for firms listed on the Korea Composite Stock Price Index (KOSPI) and Korea Securities Dealers Automated Quotations (KOSDAQ) markets, we find that human resource investments in the IACS are positively associated with firms' nonaudit service fees. Specifically, the findings show that the number of employees working in the IACS positively relates to firms' non-audit fees from the KOSPI and KOSDAQ sample. Our results indicate that this positive association is more prominent for large-sized than small-sized firms and KOSPI than KOSDAQ firms.

Keywords: IACS; internal accounting control system; human resource investment; non-audit fees; internal control; non-audit service; South Korea.

DOI: 10.1504/IJTGM.2021.114063

International Journal of Trade and Global Markets, 2021 Vol.14 No.2, pp.97 - 106

Received: 07 Jul 2019
Accepted: 12 Nov 2019

Published online: 20 Mar 2021 *

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