이익조정과 임원보수에 대한 감사보수의 차별적 반응

Although the determinants of executive compensation are said to be similar to those of audit fees, little research has covered the subject whether executive compensation affects audit fee pricing decision. The purpose of this study is to verify whether auditors asymmetrically respond to income-increasing earnings management related to executive compensation in their risk assessment by grasping a manager's intention. This study covers the 2008-2013 periods and the final sample is firm-year 3,382 firms which are listed on the KOSPI market. The results of this study are summarized as follows. I find that the association between accounting-based performance and executive compensation is magnified in firms which managers have performed not only income-increasing earnings management for simultaneously avoiding loss and pursuing their own interests but also those for simultaneously avoiding earnings decrease and pursuing their own interest. Furthermore, I find that audit fees is higher and the association between executive compensation and audit fees is much magnified in firms which managers conducted income-increasing earnings management for simultaneously avoiding loss and pursuing manager's own interest. As a result, I concluded that auditor asymmetrically respond to income-increasing earnings management according to manager's intentions to inflate earnings.