地区劳动力市场晋升激励、盈余管理与审计费用

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Abstract With the growing demand for executive talent and the gradual maturation of the executive labor market in China, regional labor market promotion incentives have become an important means of executive motivation, significantly influencing corporate operations and development potential. Using panel data from China’s A-share listed companies on the Shanghai and Shenzhen stock exchanges (2005-2023), this study examines the relationship between regional labor market promotion incentives (local tournament incentives) for CEOs and audit fees. The results show that stronger local tournament incentives are associated with higher audit fees, indicating that auditors charge more when CEOs are subject to regional labor market promotion incentives.The impact of local tournament incentives on audit fees is more pronounced in companies located in first and second tier cities, non-state-owned enterprises (non-SOEs), and firms where CEOs are not nearing retirement. This suggests that when CEOs exhibit stronger willingness to compete in regional labor market tournaments, they face heightened promotion incentives, leading auditors to charge higher fees. The degree of earnings management plays a mediating role in the positive relationship between local tournament incentives and audit fees, indicating that CEOs motivated by regional labor market promotion incentives have an incentive to manipulate earnings, thereby increasing earnings management and audit risk, which leads auditors to charge higher fees.Moving forward, when designing executive compensation incentive mechanisms, listed companies should enhance their ability to identify and respond to regional labor market promotion incentives. Auditors, in turn, should strengthen their scrutiny of such incentives. Listed companies should also prioritize executive incentive policies to mitigate moral hazards. To improve audit quality, regulators should mandate greater transparency in corporate disclosures, strengthen the review and oversight of financial statements, and prevent listed companies from using earnings management to obscure true performance.

Key words： promotion incentives local tournament incentives regional labor market audit fees earnings manage-ment

Received: 20 December 2024

PACS:	F27
	F241.2

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	WANG Cong
	YANG Fei-yu

Cite this article:

WANG Cong,YANG Fei-yu. Regional Labor Market Promotion Incentives, Earnings Management, and Audit Fees[J]. , 2025, 42(3): 77-86.

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https://xb.szu.edu.cn/EN/ OR https://xb.szu.edu.cn/EN/Y2025/V42/I3/77

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