Audit Firm Employee Job Satisfaction and Audit Quality: Evidence at the Big 4 Office Level

Posted: 24 Oct 2017 Last revised: 25 Aug 2018

See all articles by Anna Gold

Anna Gold

Vrije Universiteit Amsterdam; Norwegian School of Economics (NHH)

Yu Flora Kuang

The University of Melbourne

Gladys Lee

University of Melbourne

Bo Qin

The University of Melbourne

Date Written: October 23, 2017

Abstract

We examine the association between job satisfaction in audit offices and office-level audit quality. Using employee self-assessments of satisfaction with their work at Big 4 audit offices between 2008 and 2016, we find that job satisfaction is positively associated with audit quality. We show that audit offices with higher employee satisfaction, especially satisfaction with work-life balance, perform higher quality audits in that their clients report lower discretionary accruals, experience a lower propensity of misstatement, and relate to a lower likelihood of an undisclosed material weakness. Further, we find that the positive effects of audit office employee satisfaction are mainly applicable to non-manager employees (vis-à-vis managers, partners, and directors). Our study sheds light on how employee job satisfaction contributes to better performance in the auditing profession.

Keywords: Job Satisfaction, Audit Quality, SEC Regulation

JEL Classification: J28, M41, M42

Suggested Citation

Gold, Anna and Kuang, Yu and Lee, Gladys and Qin, Bo, Audit Firm Employee Job Satisfaction and Audit Quality: Evidence at the Big 4 Office Level (October 23, 2017). Available at SSRN: https://ssrn.com/abstract=3057746 or http://dx.doi.org/10.2139/ssrn.3057746

Anna Gold (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands
+31 20 598 25 92 (Phone)

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Yu Kuang

The University of Melbourne ( email )

Level 7, Department of Accounting
the Spot, 198 Berkeley St
Carlton, Victoria VIC 3053
Australia

Gladys Lee

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Bo Qin

The University of Melbourne ( email )

Level 7, Department of Accounting
The Spot, 198 Berkeley St.
Carlton, Victoria VIC 3053
Australia
+61383449361 (Phone)

HOME PAGE: http://www.findanexpert.unimelb.edu.au/display/person743093#tab-overview

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