Executive Compensation Defense,Auditor Reputation And Earnings Management

The "high price" salary incidents of listed company executives frequently occurred,which triggered public discussion and concern about the uneven distribution of social income.The government regulatory authorities also issued institutional policies and adjustments to alleviate such problems,since the State Council promulgated in 2009.The "restricted salary order" began,and the phenomenon of over-remuneration of listed company executives has not been suppressed,but has continued to rise.Executive compensation behavior is a product of "time-adjusted measures" of executives in the context of government pay regulation.When executives face the need for compensation,they will adopt earnings management to control the sensitivity of compensation performance,and at the same time,as a third-party supervisor.Can the external audit mechanism identify and supervise the self-interested hidden behavior of executives?This paper empirically studies the relationship between the three by selecting the sample data of listed companies in Shanghai and Shenzhen A-shares from 2014 to 2017.In the process of empirical research,whether the executive compensation behavior will lead to earnings management will be studied.Secondly,due to the differences in property rights between listed companies under special national conditions in China,and the role of government compensation control is only state-owned enterprises,the differences in the relationship between executive compensation and earnings management of listed companies under different property rights are further analyzed.Furthermore,the auditor's reputation as an external audit mechanism is used to measure the impact of the auditor's reputation on the relationship between executive compensation and earnings management,and to further analyze the impact of auditor reputation on the relationship between the two properties.The results show that:(1)Under the policy background of salary control,the salary defense demand generated by the executives for the acquisition of excess salary(current and future period)will lead to earnings management behavior;(2)the defense compensation of executives under different property rights There is a certain difference in earnings management relationship.Since the main body of the remuneration control policy is state-owned enterprises,and non-state-owned enterprises do not have the pressure of government remuneration policy control,the demand for executive compensation in state-owned enterprises is stronger and their earnings management is higher.(3)The earnings management behavior under the defense of listed company executives can be identified and mitigated by the external audit mechanism.When the listed company chooses a high-reputed auditor audit,the earnings management behavior under the executive compensation needs is certain.(4)High reputation auditors can not effectively suppress the earnings management behavior under the defense of executive compensation in state-owned enterprises,but it can effectively suppress the earnings management behavior between executive compensation and earnings management of non-state-owned enterprises.