Audit quality and engagement partner busyness: The role of internal resource allocation

IF 2.2 3区 管理学 Q2 BUSINESS, FINANCE Journal of Business Finance & Accounting Pub Date : 2023-07-20 DOI:10.1111/jbfa.12739
Katsushi Suzuki, Tomomi Takada
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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.

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审计质量与业务约定合伙人的繁忙程度:内部资源分配的作用
先前的研究发现,聘用合伙人的忙碌程度会影响审计效果。来自客户的工作量越多,合伙人就越忙,从而导致审计质量下降。然而,合伙人可利用的内部资源可减轻合伙人的工作负担,尽管这类资源的调节作用在文献中大多被忽视。由于拥有更多内部资源的合伙人的工作负担可能会减轻,我们在本研究中详细阐述了其影响。我们研究了以下几类内部资源:(1) 高级人员的可用性;(2) 客户特定信息的积累。我们的研究结果表明,当合伙人承担了来自其他客户的更高工作负担时,参与合伙人会降低客户的审计质量,而这些客户的内部资源是有限的。此外,结果表明,对于非四大客户而言,合伙人的工作量和其他客户的内部资源可用性对审计质量的相互影响更为明显。这些结果表明,内部资源分配对质量控制至关重要,尤其是对非四大的审计公司而言。
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来源期刊
CiteScore
4.40
自引率
17.20%
发文量
70
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.
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