Empirical Research On Earnings Management,Executive Compensation Gap And Audit Fees

As China's economic industry continues to flourish and the securities industry rises,the stakeholder's requirements for the quality of information related to the company become more and more concrete.For companies,their responsibility is to accurately and truly prepare financial statements in accordance with accounting standards.For accounting firms,they need to issue their own audit opinions on the audited company's financial statements.At the same time,the "high price" salary of senior executives has caused widespread concern and intense discussion among relevant government departments.When executive compensation gaps change,senior management's responses are also different.In addition,when the level of earnings management of an enterprise increases,the auditing firm faces greater auditing risks during auditing,which ultimately leads to an increase in audit fees.Therefore,the issues studied in this paper are the relationship between the earnings management and audit fees of the A-shares listed companies,and the adjustment effect of the executive compensation gap on the relationship between earnings management and audit fees.By studying the relationship between earnings management and audit fees,this paper further studies the regulatory effect of executive compensation gaps on the relationship between earnings management and audit fees,and reveals the relationship between executive compensation gaps on earnings management and audit fees.The adjustment effect.Firstly,this article adopts the method of normative research and sorts out previous research on executive compensation gaps,earnings management and audit fees.Combining with the previous research findings,we start with the theory of information asymmetry and risk premium theory,excellent contract theory,fairness theory,endowment effect,psychological contract theory,combined with the actual situation of executive compensation gap in China,and put forward relevant assumptions.Secondly,using the relevant data of China's A-share listed companies for 2013-2016,we used empirical research methods to study the relationship between earnings management and audit fees,and on this basis,from the senior management team's internal compensation gap,executives,and employee compensation.The gaps and external compensation gaps among the executives are further explored in three aspects:whether the executive compensation gap will have a regulatory effect on their relationship to verify relevant assumptions.The study finds that under the premise that other conditions remain unchanged,earnings management and audit fees are positively correlated;the internal compensation gap of senior management teams and the gap between senior management and employees have a negative effect on the relationship between the two;executive external compensation gap The regulation of the relationship between the two is not significant.And make recommendations to companies,accounting firms and policy makers.