New Zealand has continued to strengthen its financial reporting and auditing landscape after major corporate collapses highlighted audit failures contributing to investor losses. Jointly, investors have criticized exorbitant compensation paid to CEOs. While the PCAOB's (Public Company Accounting Oversight Board) emphasis on executive compensation has prompted several studies in the United States, this study is the first to examine executive compensation in the evolving setting of New Zealand. Specifically, we examine the incentive‐based components of CEO compensation arrangements, finding both short‐term incentive and stock option compensation to be significant and positively associated with audit fees. We also examine moderating effects of client governance factors and find evidence that internal governance (audit committee effectiveness, board resources, and board and audit committee diligence) moderates the association between short‐term incentive and stock option compensation, and audit fees. Taken together, our evidence suggests that auditors consider CEO performance‐linked compensation a risk factor and are pricing it into the financial statement audit, with client governance moderating this pricing effect.

中文翻译：

---

CEO薪酬，公司治理和审计费用：来自新西兰的证据

大型公司倒闭凸显出审计失误造成投资者损失之后，新西兰继续加强其财务报告和审计工作。投资者共同批评了支付给首席执行官的过高薪酬。尽管PCAOB（上市公司会计监督委员会）对高管薪酬的重视促使美国开展了几项研究，但这项研究是在不断发展的新西兰环境下首次研究高管薪酬的研究。具体来说，我们检查了CEO薪酬安排中基于激励的组成部分，发现短期激励和股票期权薪酬都非常重要，并且与审计费用呈正相关。我们还研究了客户治理因素的调节作用，并发现了内部治理（审计委员会的有效性，董事会资源，董事会和审计委员会的勤勉程度）调节了短期激励与股票期权薪酬以及审计费用之间的联系。综上所述，我们的证据表明，审计师认为与首席执行官绩效挂钩的薪酬是一个风险因素，并将其计入财务报表审计中，而客户治理可减轻这种定价影响。