This paper examines whether two corporate governance factors, accounting quality and competition intensity, improve labor investment efficiency in Korea. Manager's opportunistic behavior and the information asymmetry between manager and investors cause labor investment inefficiency. Labor investment inefficiency is defined as the gap between expected and real labor investment and the expected labor investment is measured with Pinnuck and Lillis(2007). The results are as follows. First, AQ and competition separately improve labor investment efficiency as expected. They decrease manager’s opportunistic behavior and information asymmetry between manager and investors. We document AQ increases labor investment in underinvestment sample whereas competition decreases it in over sample. Second, AQ improve labor investment efficiency much more in lower competitive situation, which is significant in under sample. It suggests both AQ and competition have complementary relationships in improving labor investment efficiency. Contributions of this paper are as follows. First, it examines whether AQ and competition improve labor investment efficiency in Korea. Second, it reports AQ has complimentary role of competition in improving labor investment efficiency.