How Does Auditor Workload Affect Employee Spending and Turnover? Evidence from Micro-Level Transaction Data

Abstract

Long hours and excessive workload have long been a concern in public accounting. We investigate the effect of audit office busyness on individual auditor consumption patterns and turnover using unique micro-level data on individual Big 4 firm employees’ bank and credit card transactions. We find that individual auditors reduce their overall spending when their audit office is busier, consistent with intense workload impacting individual auditors’ personal lives. This reduction is particularly salient in certain categories, including discretionary and health related expenditures, and is stronger for lower-paid employees, i.e., junior auditors, and in smaller audit offices. We also find that individual auditors in offices with greater workload imbalance are more likely to leave their firms and exit the audit profession. Moreover, the impact of workload imbalance on turnover is stronger for auditors who experience greater reductions in spending during busy periods, suggesting that the personal strain caused by increased workload contributes to auditor turnover. Overall, our results suggest that greater workload negatively impacts auditors’ personal lives and contributes to a talent exodus from the audit profession.

Keywords: Auditor, Busyness, Workload, Consumption, Turnover