감사보수와 감사보고시차가 임원보수에 미치는 영향

The goal of this study is to verify the assumption that the relation between audit fees and executive compensation results from the strict governance hypothesis by examining the effect of the audit report lag on that relation. This study covers the 2007-2012 periods and the final sample is firm-year 3,376 observations that meet certain condition required for this study. These results of this study are as follows: First, it appears that executive compensation is not associated with the audit report lag but audit fees are positively related to the audit report lag. These can be interpreted that audit fees are closely linked to the audit report lag based the strict governance hypothesis (Mace 1971; Vancil 1987; Hermalin 2005; Engel et al. 2010). Second, it appears that executive compensation is not associated with earnings management but audit fees are positively associated with earnings management when the audit report lag becomes longer. These suggest that the audit report delay is not related to the managerial opportunistic behavior suspected of increasing its compensation but the more auditor effort to scrutinize thoroughly the management assertion. Last, it appears that the relation between audit fees and executive compensation is magnified when the audit report lag becomes longer. This may be interpreted that relation results from the strict governance hypothesis, rather than the managerial entrenchment hypothesis. To my knowledge, this study may be the first to determine the fact that the relation between audit fees and executive compensation results from the strict governance hypothesis by using the audit report lag. This study also compensates Wysocki(2010) that did not explain the causal relationship between audit fees and executive compensation.