Center for Accounting invites you to a research seminar where Yun Sun, PhD student at Bayes Business School, UK, will give the following presentation:

“Pressured Accounts: Career Mobility and Work Consequences for Indebted Auditors”

Authors: Yun Sun (Bayes), Sam Damsgaard Enemark (Aarhus), Sonia Konstantinidi (Bayes), Arthur Kraft (Bayes), Frank Thinggaard (Aarhus)

Abstract
Using a proprietary administrative dataset on auditors’ personal indebtedness, we examine how auditors’ debt positions affect their career mobility, workload decisions, and audit outcomes. We find that (i) auditors with higher debt levels are less likely to switch audit firms and are more inclined to stay in the profession; (ii) financially stressed auditors tend to take on heavier workloads; and (iii) higher debt levels are associated with lower audit quality, particularly for continuing (rather than new) clients – suggesting that the decline in quality is not driven by attempts to attract new business. These effects are less pronounced among auditors at higher unemployment risk and among those who are senior. Our findings underscore the role of financial pressure in influencing auditor transitions and audit quality, offering implications for the profession, audit firms, and regulators.

Host: Claus Holm

Everyone is welcome!