Based on 1,798 firm-year observations from 2009 to 2013, using publicly available disclosure data for Korean listed firms, this study aims to examine whether statutory internal auditors influence firm-level stock price crash risk.,Based on the bad news hoarding theory of crash risk, the authors investigate the association between the quality of statutory internal auditors and one-year-ahead stock price crash risk. The quality of statutory internal auditors is measured as the compensation of statutory internal auditors and the financial expertise of statutory internal auditors. Stock price crash risk is measured as an indicator variable whether a firm experiences one or more crash weeks during the fiscal year period.,The authors find that higher quality of statutory internal auditors – measured through greater compensation and greater financial expertise – is associated with lower possibilities of future stock price crash risk. These results indicate that high-quality statutory internal auditors mitigate bad news hoarding of managers because of their greater capability and stronger incentive to lower litigation risk and preserve their reputation. The results are mostly robust to different measures for stock price crash risk and the quality of statutory internal auditors.,The findings of this study regarding stock price crash risk are important for investors because such risk can significantly affect investor welfare. The results indicate that statutory internal auditors play an important role in controlling future stock price crash risk and maintaining stability in the equity market.,This study adds to the extant literature on the determinants of stock price crash risk and is the first to examine the impact of internal auditors on stock price crash risk. Moreover, this study also contributes to the existing literature on internal auditor quality by showing that high-quality statutory internal auditors reduce risks in financial markets.

中文翻译：

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法定内部审计师会影响股价崩盘风险吗？来自韩国的公司级证据

基于2009年至2013年1,798个公司年度的观察结果，使用韩国上市公司的公开披露数据，本研究旨在检查法定内部审计师是否会影响公司一级的股票价格崩盘风险。作者调查了法定内部审计师的素质与提前一年的股价崩盘风险之间的联系。法定内部审计师的素质以法定内部审计师的报酬和法定内部审计师的财务专业能力作为衡量标准。股价暴跌风险是作为指标变量来衡量的，即公司在会计年度内是否经历了一个或多个暴跌周。作者发现，较高的法定内部审计师素质（通过更高的薪酬和更强的财务经验衡量）与降低未来股价崩溃风险的可能性有关。这些结果表明，高素质的法定内部审计师可以减轻经理的坏消息ho积，因为他们的能力更强，并且更有动力降低诉讼风险并维护声誉。该结果对于针对股票价格暴跌风险和法定内部审计师素质的不同衡量方法均具有较强的鲁棒性。本研究关于股票价格暴跌风险的研究结果对投资者而言非常重要，因为此类风险会显着影响投资者的福利。结果表明，法定内部审计师在控制未来股价崩盘风险和维持股票市场稳定方面发挥着重要作用。该研究为有关股价崩盘风险的决定因素增加了现有文献，并且是第一个研究其影响的文献。内部审计师对股价崩盘风险的看法。此外，该研究还表明，高质量的法定内部审计师可以减少金融市场的风险，从而为现有内部审计师质量的文献做出贡献。