| Summary: | 碩士 === 國立臺北大學 === 會計學系 === 103 === This study use the sample of the Taiwan listed companies for the period 2009-2012 to investigate the effect of compensation committee on the relationship between executive compensation and earnings management.
Compensation plans has long been regarded as one crucial mechanism to resolve the agency problem for enterprises. However, if firm’s compensation plans are based purely on accounting income, then a manager will have incentive to increase his or her compensation by earnings management. Therefore, the first objective of the study is using the prior empirical model suggested by Balasam(1998) and Shuto(2007) to examine the relationship of executive compensation and earnings management. Further more, we examine the relationship is weakened by the establishment compensation committee.
The empirical results show that there is a positive relationship between the executive compensation and earnings management. However, Compensation committee’s restraining effect does not significant.
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