Working with the Flu: The Association Between Auditor Health and Audit Outcomes
60 Pages Posted: 24 Aug 2018 Last revised: 29 Jan 2021
Date Written: January 1, 2019
This study examines whether influenza (flu), a potential threat to the conduct of public company audits, is associated with audit outcomes. Because the peak months of flu season overlap with audit busy season, audit offices most impacted by the flu may be adversely affected. The demanding nature of audit busy season and the culture of audit firms may compel employees to go to work sick, a phenomenon known as presenteeism. When auditors go to work with flu-like symptoms, cognitive functioning, resulting in brain fog, is impaired. This impairment may influence auditors’ ability to exercise judgment and professional skepticism, leading to adverse outcomes. Using data collected from the Centers for Disease Control and Prevention (CDC) we find that the filing of audit reports is delayed and audit quality suffers in audit offices most impacted by the flu. The observed effects of health impairments on company outputs have broad implications for both the audit profession and workplaces as a whole.
Keywords: influenza; non-timely filings; audit report lag; audit quality; discretionary accruals, material weaknesses
JEL Classification: I10, I12, E24, J24, M41, M42, M54
Suggested Citation: Suggested Citation