Does Audit Partner Workload Compression Affect Audit Quality?

Jun Chen, Wang Dong, Hongling Han and Nan Zhou

European Accounting Review, 2020, vol. 29, issue 5, 1021-1053

Abstract: The effect of workload compression on the behavior of individual auditors has received extensive attention from regulators and scholars. We study this effect by utilizing two unique institutional features of the Chinese capital market: (1) the auditor signature requirement that reveals audit partner identities and (2) the uniform December 31 fiscal year-end that intensifies workload compression for audit partners. Calculated based on audit fees, our new measure of audit partner workload compression (APWC) is negatively related to accruals quality and the probability of modified audit opinions, while positively associated with the propensity to report small profits and the prospect of audit report delays. Nevertheless, accounting firms and client firms with audit partners facing workload compression are not more likely to receive government sanctions. These findings imply that APWC impairs audit quality but not to the extent that it would lead to egregious outcomes. Our evidence supports the PCAOB call to monitor workloads for individual auditors.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/09638180.2020.1726196 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:euract:v:29:y:2020:i:5:p:1021-1053

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REAR20

DOI: 10.1080/09638180.2020.1726196

Access Statistics for this article

European Accounting Review is currently edited by Laurence van Lent

More articles in European Accounting Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().