This study investigates the effect of management ownership on the demand for qualitydifferentiated audits using a sample of listed companies in Korean securities market. The finance literature finds that levels of management ownership reflect two agency problems between managers and outside shareholders. First, there is a convergence of interest hypothesis, such that managers with smaller shareholdings have weaker incentives to act in outside shareholders' interests. Second, there is an entrenchment hypothesis, such that managers with larger shareholdings have greater control over the company and therefore greater scope for acting in their own private interests. Auditing helps prevent managerial opportunism because that makes it more difficult for managers to conceal the consequences of their actions from investors. Also, managers can bond themselves to outside shareholders by selecting highquality auditor. It follows that when agency costs are greater there will be increased demand for higher-level audit quality. Agency theory therefore predicts a positive association between agency costs and the selection of high-quality auditor. This study investigates the empirical relationship between management ownership and three proxy of audit quality. Three variables can be used as proxies of audit quality: auditor size, industry specialization, audit fee. We find evidence of a significant non-monotonic relationship between management ownership and four proxy of audit quality. Consistent with a divergenceof- interests hypothesis, the association between management ownership and audit quality is found to be significantly negative within low regions of management ownership. The association is significantly positive within high regions of management ownership, as suggested by an entrenchment hypothesis. The non-linearity is consistent with the finance literature and with the prediction of agency theory. These evidences suggest the possibility that high-quality auditor contributes to addressing the agency problem between managers and shareholders.