Auditors' workload and audit quality under audit hour budget pressure: Evidence from the Korean audit market

Abstract

By utilizing unique audit hour (actual and budgeted) data from Korea, this study examines the impact of auditors' workload on audit quality under audit hour budget pressure. We find the intensity of auditor workload has a negative impact on audit quality when total audit hours exceed budgeted hours (i.e., unfavourable budget variance). When we breakdown the audit workload by auditor level, we find partner workload has a negative impact on audit quality regardless of the budget variance, while senior auditor workload negatively affects audit quality only when the budget variance is unfavourable. We cautiously interpret our empirical findings to suggest that stress and burnout caused by increased audit hours under budget pressure can compel auditors to engage in behaviours that undermine audit quality.