The Impact of Equity-based Compensation of Audit Committee Members on Audit Fees

• Main Authors: Chao-ChuanChen, 陳昭全
• Other Authors: Ting-Kai Chou
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/w3e9b2

碩士 === 國立成功大學 === 財務金融研究所碩士在職專班 === 104 === This study focuses on whether audit committee members receiving equity-based compensation affects the level of audit fees. Based on a study of S＆P 1500 companies from the years 2002 to 2013, the empirical results reveal a significantly negative association between the ratio of equity-based compensation to total compensation of audit committee members and audit fees after controlling for the complexity of the company, its business and financial risk factors, unfavorable reporting issues, several factors related to the auditor, and corporate governance variables. This indicates that audit committee members receiving a higher proportion of equity-based compensation will result in lower audit fees being charged by the CPA, thus supporting the alignment theory. The aim of this study is to assist investors in understanding that when audit committee members receive a higher proportion of equity-based compensation in terms of their total compensation packages, overall the company will have better performance, and thus lower audit fees. This study thus provides a reference to investors when making investment decisions.