Executive Incentives,Earnings Management And Audit Fees

With the emergence of the US financial crisis in 2008,sweeping the world,different countries in the country have been hit,and China as a supply chain of the global value chain,more serious,then,due to the economic downturn,listed companies out of order to maintain the company The stock price runs in the normal range,thus conveying the good running situation of the company to the outside world.It usually whitewashes the listed company's statements and aggravates the degree of earnings management.Earnings management can be divided into real earnings management and accrued earnings management,both of which are tools to hedge accounting performance down.Generally speaking,it is widely believed that the earnings management of listed companies will convey unnecessary noise to the capital market,and investors will suffer losses.Therefore,it is necessary to strengthen the external audit to curb earnings management,but for many years.In the practice of our country,from the perspective of our country's law,not only the joint venture of CPAs and listed companies but also the earnings management,but also the false financial statements,for the CPA,is only a means of administrative punishment,and is not enough to make registration Accountants can suppress the means of earnings management.And the real earnings management is the internal behavior of the company,and the auditor can't interfere with the internal behavior of the company without any reason.Therefore,it is necessary to start from the internal operation mechanism of the enterprise and find out the reasons for the listed company to make earnings management,so as to truly suppress the earnings management.As China is shifting from a planned economy to a market economy,managers are a scarce resource and therefore have a higher premium in the managerial labor market,but in state-owned enterprises,price controls distorted the price mechanism and Managers can't be effectively motivated,but managers will add more hidden excess on-the-job consumption,which will increase the cost of supervision and create serious' moral hazard'.In private enterprises,there is no regulation on prices,but private enterprises are mostly from family businesses.There is a situation of two-in-one,management power is too high,and there is a discretionary power.And because private enterprises are too promising for short-term economic profits,for example,private enterprises face market risks in the course of their operations,and few companies spend huge sums of money to do research and development;in the photovoltaic industry,for example,private enterprises usually want to reduce marginal costs.Increasing marginal profit to increase accounting profits,and increasing accounting profits for the purpose of expanding production,will result in overcapacity in the industry and easier formation of bad debts.This paper uses 2008-2015,A-share listed companies as a sample to construct audit fees to return to two types of earnings management,and finds that audit fees can not inhibit two types of earnings management;at the same time,according to the nature of property rights,for state-owned enterprises and private enterprises In the return,it is found that in private enterprises,both types of earnings management will increase audit fees.Secondly,on the basis of the original model,monetary compensation and equity incentives are added as adjustment variables.The empirical results show that monetary compensation can restrain two types of earnings management,while equity incentives can't have an effect on suppressing earnings management.Similarly,according to the nature of property rights.It is found that the monetary compensation of managers in private enterprises is lower than the monetary compensation of state-owned enterprise managers,and it cannot restrain the earnings management,thereby reducing audit fees.In state-owned enterprises,the increase in managers' monetary compensation can curb two types of earnings management.In addition,in the equity incentives,private enterprises are implemented to a greater extent than state-owned enterprises,but from the empirical results,they cannot support equity incentives to reduce the extent to which enterprises implement earnings management.Through the above research,the application and development of the optimal contract theory in China has been enriched.And partly explain the rationality of thelong-term plague "high price compensation"...