Salary Perception and Career Prospects in Audit Firms

58 Pages Posted: 9 Aug 2019 Last revised: 12 Jul 2020

See all articles by Ahmad Hammami

Ahmad Hammami

John Molson School of Business, Concordia University

Rucsandra Moldovan

John Molson School of Business, Concordia University

Elisabeth Peltier

Concordia University, Quebec; Concordia University, Quebec

Date Written: February 16, 2020

Abstract

We examine the role that auditor’s salary perception has on audit quality and delay. Using Glassdoor ratings by U.S. Big 6 audit firm employees in audit and assurance, we first document that there is discrepancy between pay perception and reality. The discrepancy is explained, though not completely, by salary level, comparisons to peers and superiors, firm-wide attitudes, cost of living and human capital in the area, work-life balance, and perceived career prospects. Surprisingly, the unexplained pay dissatisfaction relates positively with audit quality (small profits and going concern opinions) and audit efficiency (audit report lag), after controlling for salary level. Further tests show that an audit employee’s expectation of career opportunities moderates this result. Our findings contribute to a greater understanding of the audit employee-level factors that influence audit work outcomes.

Keywords: Audit firms, Big 6, Salary, Pay satisfaction, Salary perception, Career opportunities, Glassdoor

JEL Classification: M42, M41, J30

Suggested Citation

Hammami, Ahmad and Moldovan, Rucsandra and Peltier, Elisabeth, Salary Perception and Career Prospects in Audit Firms (February 16, 2020). Available at SSRN: https://ssrn.com/abstract=3431424 or http://dx.doi.org/10.2139/ssrn.3431424

Ahmad Hammami

John Molson School of Business, Concordia University ( email )

Montreal, Quebec H3G 1M8
Canada

Rucsandra Moldovan (Contact Author)

John Molson School of Business, Concordia University ( email )

Montreal, Quebec H3G 1M8
Canada
+1-514-848-2424 ext 2528 (Phone)

HOME PAGE: http://https://sites.google.com/site/rucsandramoldovan

Elisabeth Peltier

Concordia University, Quebec ( email )

1455 de Maisonneuve Blvd. West
Montreal, H3G 1M8
Canada

Concordia University, Quebec ( email )

1455 de Maisonneuve Blvd. West
Montreal, H3G 1M8
Canada

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