The purpose of this paper is to investigate the impact on pay-performance sensitivity of a commitment by regulatory bodies to monitor the auditing of managers' financial reporting. We approach our investigation first by modeling the effects of an imposed mandatory audit of the auditor. We...

The purpose of this paper is to investigate the impact on pay-performance sensitivity of the Sarbanes-Oxley Act. We compare managers' pay-performance sensitivity before and after 2001-2002, a period during which regulatory changes were initiated to increase scrutiny over managerial manipulation...