Auditor Workload Compression and Busy Season Auditor Switching

López, Dennis M.; Peters, Gary F.

doi:10.2308/acch-50024

Cited by 14 publications

(21 citation statements)

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“…The means for BUSYSEAS shown in Table indicate that over 84 percent of Australian public firms have June 30 year‐ends. Lopez and Peters (, ) argue that workload compression during the audit busy season reduces audit quality, which suggests that the negative effect of BPARJUN on audit quality should be stronger than that of BPAROJUN . Finally, we separate APB into the number of new clients ( BPARNEW ) and the number of old clients ( BPAROLD ), where new clients are defined as those with a partner tenure of one.…”

Section: Resultsmentioning

confidence: 99%

What is the Relationship Between Audit Partner Busyness and Audit Quality?

Goodwin

2015

Contemporary Accting Res

157

121

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Contemporaneous studies generally find a negative relationship between audit partner busyness (APB), measured as the number of clients in an audit partner's portfolio, and audit quality. Their argument is that a busy partner does not devote sufficient time to properly audit his average client. Contrary to these studies, we argue that when busyness is optimally chosen by the partner, in equilibrium, there is no causal relationship between APB and audit quality. Using Australian data for the 1999-2010 period, we show that APB is not reliably linked to audit quality, consistent with this equilibrium theory. We argue that causality can be ascribed to the APB-audit quality relationship when accounting scandals exogenously shocked the Australian audit market during the 2002-04 period and APB likely deviated from optimum levels. Supporting this disequilibrium view, we find that higher APB reduces a partner's propensity to issue first-time going-concern opinions during this period. Our evidence highlights the importance of the equilibrium condition in testing empirical associations between audit outcomes and endogenous auditor attributes, and shows that the detrimental effect of APB on audit quality is not as pervasive as contemporaneous studies suggest. * Accepted by Michel Magnan. We gratefully acknowledge the helpful comments and suggestions made by

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Section: Resultsmentioning

confidence: 99%

What is the Relationship Between Audit Partner Busyness and Audit Quality?

Goodwin

2015

Contemporary Accting Res

157

121

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“…Pressures to meet time budgets and to ensure the efficiency of audit engagements may cause auditors to, for example, skip time‐consuming procedures or accept weak audit evidence. Evidence of these effects is presented in two recent studies that find time pressure to be a factor that reduces audit quality (Lopez & Peters, ; Svanström, ). Likewise, empirical studies have shown that pressures to meet or beat time budgets or time deadlines compromise audit quality (Otley & Pierce, ; Pierce & Sweeney, ).…”

Section: Previous Research and Hypotheses On Performance Evaluations mentioning

confidence: 98%

“…Time budgets and billable hours are the focus areas commonly employed in professional service firms, in which a focus on time inputs and on the efficient use of time appears to be essential to management control (Cooper et al ., ; Anderson‐Gough et al ., ; Gendron & Spira, ; Lewis & Brown, ). Given the importance of time as the primary cost driver, previous research has focused on how, why and with what consequences this cost driver is managed within audit engagements (Alderman & Deitrick, ; Kelley & Margheim, ; Otley & Pierce, ; Coram et al ., ; Pierce & Sweeney, ; Lopez & Peters, ; Beekes et al ., ; Svanström, ). This body of research has identified that audit firms use time budgets, measure engagement profitability (whether fees cover costs), and emphasize the importance of time deadlines.…”

Section: Previous Research and Hypotheses On Performance Evaluations mentioning

confidence: 99%

Performance Evaluations in Audit Firms: Evaluation Foci and Dysfunctional Behaviour

Johansen

Christoffersen

2016

Int J Auditing

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Previous research has only minimally examined the association between the behaviour and performance evaluations of individual auditors beyond the use of efficiency-focused evaluations. We examine the association between dysfunctional auditor behaviour and three evaluation foci: an efficiency focus, a client focus and a quality focus. Our results, which are based on questionnaire responses from 196 auditors, demonstrate that an efficiency focus is not associated with dysfunctional behaviour. A client focus is found to be associated with dysfunctional behaviour. Finally, and perhaps most importantly, our results show that it seems possible to limit dysfunctional behaviours through a quality focus in performance evaluations. Our results provide insights of use to practitioners and regulators on how performance evaluations may not only induce but also reduce dysfunctional auditor behaviours.

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“…Typically, the fiscal year-end date of the companies is the 31 st of December each year, when most companies' financial accounts are audited. The period of the financial year-end creates a condition for the auditors known as the 'busy season' (López & Peters, 2011). In this busy season, the resources of the audit firms reach their limits, which causes extended daily work for the auditors.…”

Section: Audit Timingmentioning

confidence: 99%

“…(Whittred & Zimmer, 1984 : 80) referred to the audit timing as "the natural log of days from financial year end to the date of auditor signature". The importance of this factor comes from the thought that the auditors' performance and behaviour might be affected by the pressure of demands for the audit services during the busy season (López & Peters, 2011;Sweeney & Summers, 2002). Studies in different countries have focused on examining the relationship between the audit busy season and audit fees.…”

Section: Audit Timingmentioning

confidence: 99%

Determinants of Audit Fees : Evidence from UK Alternative Investment Market

Mohammed

Saeed

2018

ACAD J NAWROZ UNIV

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The main purpose of this study is to examine the determinants of audit fees in the Alternative Investment Market (AIM) using a sample of 23 machinery equipment companies covering the period from 2007 to 2011. The factors that have been hypothesized to be having a significant correlation with audit fees are auditee size, auditee complexity, audit risk, and auditor size. The results show that auditee size and auditee complexity are the main significant determinants of audit fees in the AIM. The findings also indicated a positive relationship between audit timing and audit fees. However, there was not significant evidence of a positive correlation between auditee risk and audit fees, which demonstrated that risk perceived by the auditor does not affect the value of fees. The results also indicated that there is no difference in the fees value between large or small clients. Moreover, the study demonstrated that there is no correlation between providing non-audit service and audit fees. Therefore, it is believed that the differences of these results with other studies in this field are due to the differences in the regulatory framework of the market selected as a sample for this study.

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Auditor Workload Compression and Busy Season Auditor Switching

Cited by 14 publications

References 0 publications

What is the Relationship Between Audit Partner Busyness and Audit Quality?

What is the Relationship Between Audit Partner Busyness and Audit Quality?

Performance Evaluations in Audit Firms: Evaluation Foci and Dysfunctional Behaviour

Determinants of Audit Fees : Evidence from UK Alternative Investment Market

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