Employee Satisfaction and Work-Life Balance in Accounting Firms and Audit Quality

Auditing: A Journal of Practice & Theory (AJPT), Forthcoming. https://doi.org/10.2308/AJPT-18-029

60 Pages Posted: 5 Jan 2018 Last revised: 13 Dec 2020

See all articles by Joshua Khavis

Joshua Khavis

University at Buffalo, SUNY

Jagan Krishnan

Temple University - Department of Accounting

Date Written: October 26, 2020

Abstract

The PCAOB’s audit-quality framework posits that superior inputs are essential for achieving high audit quality, and these inputs depend on the accounting firm’s ability to recruit and retain quality personnel. However, the link between these inputs and audit quality has gone largely unexplored due to a lack of data. We use employee-level reviews of accounting firm employers to examine some of these inputs, and test whether accounting firm’s internal characteristics explain employee satisfaction and audit quality. We provide descriptive evidence suggesting that “career opportunities,” “senior management,” and “culture and values” play a more important role in employees’ satisfaction than do “compensation and benefits” or “work-life balance.” While work-life balance is not among the most important factors that are associated with audit employees’ overall satisfaction, better work-life balance is nonetheless associated with higher audit quality. However, we do not find a significant association between audit-employees’ overall job satisfaction and audit quality.

Keywords: audit quality, audit quality indicators, audit quality framework, firm culture, employee satisfaction, work–life balance,work-life balance

JEL Classification: M42

Suggested Citation

Khavis, Joshua and Krishnan, Jagan, Employee Satisfaction and Work-Life Balance in Accounting Firms and Audit Quality (October 26, 2020). Auditing: A Journal of Practice & Theory (AJPT), Forthcoming. https://doi.org/10.2308/AJPT-18-029, Available at SSRN: https://ssrn.com/abstract=3095057 or http://dx.doi.org/10.2139/ssrn.3095057

Joshua Khavis (Contact Author)

University at Buffalo, SUNY ( email )

346 Jacobs Management Center
Buffalo, NY 14214
United States

Jagan Krishnan

Temple University - Department of Accounting ( email )

Fox School of Business & Management
1801 Liacorous Walk
Philadelphia, PA 19122
United States
215-204-8126 (Phone)
215-204-5587 (Fax)

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