Financial statements are one of the important information that are provided by company. Reliability of financial statements are increased by auditing because auditing is helpful to resolve agency problem. Thus, auditors should provide high quality audit services to information users because they have duty to increasing reliability. Auditor’s efforts for improving audit quality starts with audit engagement. Auditors conduct audit quality control before audit engagement, because if they fail to audit quality control, it is more likely to lead audit failure eventually. Thus, the purpose of this study is to review characteristics of an accounting firm that have effects on audit engagement risk. Specifically, this study reviews characteristics of an accounting firm that decides the audit engagement risk using samples that 125 accounting firm’s annual reports from 2003 to 2012. Specifically, accounting firms of Korea have had to submit their annual report to the Financial Supervisory Service since 2003. Contribution of this study is that it is the first study which reviews the degree of audit engagement management and characteristics variables of an accounting firm with regard to an audit engagement. Namely, we provide characteristic variable that can distinguish audit firms which are good at manage audit engagement risk and the others. Unlike the previous studies which consider the frequency of auditor’s opinion as a proxy of audit quality, this study suggests that the percentage of qualified opinions and disclaimer of opinions can be related to audit failure. This study provides evidence which characteristics variables that allow distinguishing accounting firms that manage audit engagement risk well from the others. This result could help a supervisory institution to find and govern accounting firms that show weak performance in managing audit engagement risk to increase the efficiency of supervisory work.