مقاله انگلیسی رایگان در مورد سلامت حسابرس و نتایج حسابرسی قبل از COVID-19 – الزویر 2023

Abstract

     This study examines whether influenza-like illnesses (ILIs), a potential threat to the conduct of public company audits, are associated with audit outcomes. Because the peak months of flu season overlap with audit busy season, audit offices most at risk of ILIs 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 is impaired, resulting in brain fog. 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 at risk of influenza-like-illnesses. The observed effects of health impairments on company outputs have broad implications for both the audit profession and workplaces as a whole.

Introduction

     Influenza (the flu) infects as many as 60.8 million people in the U.S. each year (CDC, 2017), approximately 20 percent of the population. The magnitude of individuals with the flu results in significant productivity loss in the workplace, where employees lose 69 percent of expected working hours while sick (Van Wormer et al., 2017). As auditing requires high cognitive functioning, a capability that is impaired when auditors are sick, we predict that audit firms are highly susceptible to the costly effects of influenza-like illnesses (ILI). Flu season peaks in the months of December through March and therefore directly overlaps with audit busy season.1 Although the timing of the flu is consistent year-to-year, the severity and distribution of the disease vary over time and across states. This study examines the risk of contracting an influenza-like illness and its impact on auditors’ work.2

     Employees who have the flu often go to work sick, an act referred to as presenteeism, which limits their productivity on the job (Goetzel et al., 2004, Hemp, 2004, Hansen and Anderson, 2008, Schultz et al., 2009, Petrie et al., 2016). Anecdotal evidence suggests that auditors rarely stay at home when sick. To corroborate this, we conduct an exploratory survey, the results of which identify that 87 percent of auditors go to work while sick.3,4 Among other debilitating physical conditions, presenteeism is characterized by an influenza-induced phenomenon commonly referred to as “brain fog,” a symptom that reduces alertness, memory, and accuracy (Smith et al., 2004).5 Audit work requires judgment, professional skepticism, and overall high cognitive functioning, and thus, brain fog may negatively influence auditors’ work. If this is the case, impaired cognitive functioning may result in longer audit delays and impaired audit quality. However, auditors consistently work under pressure and may be able to overcome the negative effects of an ILI.6 Regardless, we predict that when auditors are at greater risk of an influenza-like illness, audit report lag will be prolonged and audit quality will suffer.

Conclusion

     This paper investigates whether influenza-like illnesses, whose peak season directly overlaps with audit busy season, are associated with audit outcomes. We examine the impact of ILIs on audit delay and quality and find that audit delay, measured with report lag and the likelihood of non-timely filings, increases when auditors are more likely to be at risk of an ILI and ILI symptoms induce inefficiencies in the audit. We find that audit quality, measured with discretionary accruals and material weakness errors, declines in states with the worst ILI outbreaks. Overall, our results suggest that ILIs may impair auditors’ judgment and decision-making abilities. To our knowledge, this is the first study to examine the association between auditor health and audit outcomes.

     The results of this study are highly informative to audit firms. We propose that the effects of ILIs on audit outcomes arise when auditors go to work while sick. The heavy demand of busy season workloads may create environments in which auditors feel like taking a sick day is not an option. In addition, culture and work-life-balance initiatives within a firm or office may influence auditors’ decision to work while sick. This issue further extends to inter-firm relationships, where interactions with other engagement team members may drive perceptions of the appropriateness of working while sick. If auditors did not work while sick, firms and offices would have better visibility into the impact of influenza on productivity and be able to assign additional resources to audit tasks, as needed. Our evidence may encourage audit firms to evaluate policies that incentivize working while sick.