This meta-analysis takes stock of 121 C.E.O. pay studies published between 1998 and 2018 with the objective of identifying the main drivers of C.E.O. pay from a global perspective and contributing to the agency vs managerial debate on this ground. The meta-results disclose a positive C.E.O. pay–performance correlation (the highest correlation coefficient corresponds to Earnings per share with a 34%) as the agency theory prescribes and the governance policies promote. However, firm size still predominates as the main driver of C.E.O. pay (correlation coefficient is around 44%) according to managerial premises. Moreover, our results reconcile both approaches because results of the meta-regressions suggest that larger companies and more independent boards strengthen the pay–performance association. Additional analyses of moderating factors on C.E.O. pay forces do not provide robust conclusions, though, they suggest: (1) weak impact, if any, of both the Cadbury Report and the S.O.X.; and (2) lack of homogeneity in the banking industry despite its specific regulation.

Ongoing regulatory efforts aim to link managerial compensation with a firm’s performance. However, little is known about whether and how Corporate Social Responsibility (CSR) goals are considered in the design of the managerial compensation scheme. This paper addresses this research question by analyzing a sample of Spanish listed firms for the period spanning 2013–2018. The outcomes of the regressions suggest that there is a positive relationship between CSR and the managerial compensation, but this relationship is significant only with lower levels of CSR. The study also reveals that CSR is positively associated with the proportion of equity-based compensation and, therefore, negatively associated with the proportion of cash-based compensation. In all, our results suggest that firms with lower levels of CSR, likely following social pressures, seek to improve their investments in CSR; and, in doing so, they design a managerial compensation scheme that incentivizes the manager to meet the firm’s goals related to CSR investments. Hence, since CSR is associated with an increase in the long-term firm’s value, the equity-based component of the managerial scheme is higher than in the remaining firms. However, the high proportion of cash-based compensation is far from the desirable goals promoted by the Governance Codes.

In this paper, we provide empirical evidence for the impact of disciplinary sanctions imposed on Spanish auditing firms and their engagement partners. The disciplinary sanctions resulted from external investigations, which revealed misapplications of auditing standards. In particular, we evaluate (a) the efficacy of the external supervisory board in identifying low-quality auditors and (b) the effectiveness of the disciplinary system in improving the quality of subsequent statutory audits performed by the sanctioned auditors. We employ two earnings management indicators as proxies for audit quality: loss avoidance through extraordinary items and abnormal accruals. And we compare these measures in the financial statements of client companies (auditees) audited by sanctioned and non-sanctioned auditors between 1995 and 2007. Our evidence is mixed. The results show that companies audited by Non-Big 4 sanctioned auditors in the pre-inspection period are less likely to avoid bottom-line losses. Additionally, we conclude that use of this earnings management tool decreases in the post-investigation period for all sanctioned auditors, whether Big 4 or Non-Big 4 firms. Contrary to our expectations, the enhancement performance on this measure of audit quality is observed only for smaller fines. The discretionary accrual approach to earnings management does not offer significant results, however. Therefore, the conclusions are not robust, and further investigation is needed. A feasible explanation for the elusive conclusion may be based on the strong incentives for private firms to avoid bottom-line losses for financing purposes and to manipulate earnings to minimize tax payments.

We analyse trends in inflation-adjusted audit and non-audit fees from 2003 to 2009 with the aim of identifying the impact of International Financial Reporting Standards (IFRS) in Spain, where (a) the shift from national to international accounting standards represented major changes and (b) the implementation process was conducted in 2005 for group accounts of listed companies and 2008 for the individual accounts. To that end, we build a well-tested audit and non-audit fee model based on 2003 and compare the actual with the predicted values had the accounting reforms not taken place. We report unexpected higher audit fees for the group accounts model in the years 2004, 2005 and 2006. A plausible explanation for these results is the incremental audit costs associated with the mandatory IFRS adoption. Similarly, the unexpected increment in 2008 for parent company audit fees is feasibly associated with the new domestic accounting rules. The behaviour of non-audit fees is more erratic and likely influenced by the auditors’ independence regulation enacted in 2002. We only identify significant prediction errors in 2008 for group accounts. Total fees exhibit significant increases in 2005 and 2008 for group accounts and 2008 for parent company accounts. Our results are robust to different additional tests.

This study aims to identify the main determinants of audit failure and contribute to the current debate raised by recent European Union regulation on auditor’s tenure and economic policies to prevent impairment of auditor’s independence. We approach audit failure through auditing enforcement releases triggered by the investigations conducted by the Spanish public oversight board. The sample of sanctioned individual auditors and audit firms covers the period 2002–2013. Our results reveal that audit failure likelihood increases when the probability of financial distress is higher, the auditor is permissive of upward earnings management, and the audit report is signed by an individual auditor. The results reveal a positive association between auditor tenure and audit failure only for individual auditors. The relative economic weight of the auditor–client is also positively associated with audit failure, plausibly because audit firms are more concerned with reputation loss tied to big scandals than succumbing to economic pressure from their clients.