The Influence Of Executive Compensation Incentives On Audit Pricing

At present,the government-guided pricing is mainly used in our audit business.Although the pricing principle is the same in different places,there is no unified pricing basis in reality.Accounting firms compete with each other through price war,which leads to the confusion of audit market pricing.At the same time,the issue of "sky-high compensation" of senior executives is very easy to induce the earnings management behavior of senior executives,which is not conducive to optimizing corporate governance,and has attracted social attention.Currently,some researchers have investigated the economic consequences of executive incentives and influential factors of audit pricing,but there is little research on whether the implementation of executive compensation incentive policy will affect audit pricing of firms.Based on this,this thesis combines the internal governance and external supervision of listed companies to study the impact of executive compensation incentives on audit pricing,and to include the study of factors such as executive earnings management behavior and the effectiveness of internal control.Break throughs and innovations in the perspective of research have enriched research in this field.By combining theoretical research with empirical analysis,this thesis firstly summarizes the existing research achievements at home and abroad,finds the gaps in the research and determines the research direction of the article.Second,on the basis of principal-agent theory,information asymmetry theory,and incentive theory,the thesis puts forward that earnings management plays an intermediary role in the relationship between executive compensation incentives and audit pricing.Internal control plays a moderating role in earnings management and audit pricing.Executive compensation incentives are positively influencing audit pricing through earnings management,while internal controls are moderating this impact.Based on this,a series of multiple linear regression models(regulated intermediary models)were constructed to analyze the relationship between executive compensation incentives,earnings management,internal control and audit pricing in CSCL A-listed companies from 2010 to 2020.The conclusions of this thesis are as follows:(1)Executive compensation incentive is positively related to audit pricing.(2)Pay incentives are positively correlated with earnings management.(3)Earnings management is positively correlated with audit pricing.(4)Earnings management plays a positive intermediary role in the relationship between executive compensation incentives and audit pricing.(5)Internal control plays a negative role in the relationship between earnings management and audit pricing.(6)Executive compensation incentives positively influence audit pricing through earnings management,and internal controls negatively regulate the relationship between the three.(7)When the audited entity is a non-state-owned listed company,the influence of salary incentives on audit pricing is more obvious.Finally,according to the conclusion of the study from the perspective of the internal governance of listed companies and the management of accounting firms,put forward relevant recommendations.This study has reference value for optimizing the company’s compensation incentive policy and reasonable pricing.