Even satisfied employees don't always produce better audits

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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 advancement opportunities, firm culture and 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' judgements 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, , 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 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 perceptions of satisfaction and work-life balance are linked with audit quality," says Khavis.

More information: Joshua A. Khavis et al. Employee Satisfaction and Work-Life Balance in Accounting Firms and Audit Quality, AUDITING: A Journal of Practice & Theory (2020). DOI: 10.2308/AJPT-18-029

Citation: Even satisfied employees don't always produce better audits (2021, March 3) retrieved 26 May 2024 from https://phys.org/news/2021-03-employees-dont.html
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