{"title":"Audit quality and engagement partner busyness: The role of internal resource allocation","authors":"Katsushi Suzuki, Tomomi Takada","doi":"10.1111/jbfa.12739","DOIUrl":null,"url":null,"abstract":"<p>Prior studies have found that engagement partner busyness influences audit effectiveness. The more workload partners have from clients, the busier partners will be, resulting in lower audit quality. However, internal resources available to partners can attenuate the partners’ work burden, although the moderating effect of such resources has been mostly overlooked in the literature. As partners’ work burden could lessen for a partner with more internal resources, we elaborate on its effect in this study. We examine the following types of internal resources: (1) availability of higher-ranked personnel and (2) accumulated client-specific information. Our results show that engagement partners reduce audit quality for a client when partners bear higher work burden from other clients, for which limited internal resources are available. Moreover, the results indicate that this mutual impact on the audit quality of partners’ workload and internal resource availability for other clients is more pronounced for non-Big 4 clients. These results suggest that internal resource allocation is critical for quality control, especially for non-Big 4 audit firms.</p>","PeriodicalId":48106,"journal":{"name":"Journal of Business Finance & Accounting","volume":"51 5-6","pages":"1046-1083"},"PeriodicalIF":2.2000,"publicationDate":"2023-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Business Finance & Accounting","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/jbfa.12739","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Prior studies have found that engagement partner busyness influences audit effectiveness. The more workload partners have from clients, the busier partners will be, resulting in lower audit quality. However, internal resources available to partners can attenuate the partners’ work burden, although the moderating effect of such resources has been mostly overlooked in the literature. As partners’ work burden could lessen for a partner with more internal resources, we elaborate on its effect in this study. We examine the following types of internal resources: (1) availability of higher-ranked personnel and (2) accumulated client-specific information. Our results show that engagement partners reduce audit quality for a client when partners bear higher work burden from other clients, for which limited internal resources are available. Moreover, the results indicate that this mutual impact on the audit quality of partners’ workload and internal resource availability for other clients is more pronounced for non-Big 4 clients. These results suggest that internal resource allocation is critical for quality control, especially for non-Big 4 audit firms.
期刊介绍:
Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.