Even satisfied employees don’t always produce better audits

Exhausted businesswoman working at office with stacks of binders on her desk.

Release Date: March 2, 2021

“High workloads can impair auditors’ judgments and lead to compromised procedures, resulting in decreased audit quality. ”
University at Buffalo School of Management

BUFFALO, N.Y. — Accounting firms that overwork their employees are less likely to produce high-quality audits—even if the employees are satisfied with their careers, according to new research from the University at Buffalo School of Management.

Forthcoming in print in Auditing: A Journal of Practice and Theory, the study found that career advancement opportunities, firm culture and senior management have the greatest impact on auditor job satisfaction, but those factors may not necessarily improve audit quality. 

“Finding and retaining qualified staff poses serious concern for large audit firms, and employees have been dissatisfied with the long hours associated with their careers,” says lead author Joshua Khavis, assistant professor of accounting and law in the UB School of Management. “These high workloads can impair auditors’ judgments and lead to compromised procedures, resulting in decreased audit quality.”

The researchers analyzed employee reviews from job recruiting site Glassdoor.com, spanning nearly 20,000 employee reviews across 137 accounting firms from 2008 to 2016. The reviews are 1-to-5-star ratings of employees’ overall assessment of their employers, as well as five specific characteristics: career opportunities, compensation and benefits, work-life balance, senior management, and culture and values. 

Their analysis of these reviews also revealed that work-life balance is as important as compensation in determining overall satisfaction of employees at accounting firms, and that employees at the Big Four accounting firms consistently rate their employer higher than those at other firms.

“Our unique crowdsourced dataset allows us to provide the first large-sample glimpse into how employee perceptions of satisfaction and work-life balance are linked with audit quality,” says Khavis. 

Khavis collaborated on the study with Jagan Krishnan, PhD, professor of accounting in the Temple University Fox School of Business.

The UB School of Management is recognized for its emphasis on real-world learning, community and economic impact, and the global perspective of its faculty, students and alumni. The school also has been ranked by Bloomberg Businessweek, the Financial Times, Forbes and U.S. News & World Report for the quality of its programs and the return on investment it provides its graduates. For more information about the UB School of Management, visit mgt.buffalo.edu.

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Kevin Manne
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School of Management