내부감사의 성과보상이 이익조정에 미치는 영향

Internal audit is an essential organization of a company, an organization that has the authority to comprehensively examine all executive decisions. Consequently, it is important for an internal auditor to have the necessary qualifications and autonomy to voice objective views. Yet, compensation of internal auditors includes stock options or linked to the company or executive performance. Such compensation may hinder the check－and－balance between the management, and Flynn and Hills(2008) found that people in general perceive that compensation for an audit board in form of stock options reduces the earnings quality. Bierstaker et al.(2012) reported that compensation scheme of auditors may effect work quality after surveying experienced audit board members on the relationship between compensation and independence. However. the preceding studies do not include the effect of compensation on accounting information, an internal audit output. As a result this paper studies the effect of auditor compensation to earnings management by using auditor compensation of public institutions that disclose details on pay such as base salary and performance compensation. The study indicates negative relationship between earnings management and payment of compensation, the amount, and the compensation to total pay ratio. This result can be understood as the following: compensation increases job loyalty and controls earnings management. However, this study is limited to public institutions and does not include companies in general. As the preceding studies have pointed out, public institutions differ from other companies in ways that they have political issues in management turnover and have external inspection by the Board of Audit and Inspection. Despite the limitation, this paper is meaningful for the quantitative study as it conducted on auditor compensation scheme at the present time when the role of auditor is viewed more important than ever.