Resilience and reduced audit quality practices beyond the role stress model

Abstract

PURPOSE: The study analysed the incidence and predictors of Reduced Audit Quality Practices (RAQP), as well as the consequences of burnout in Maltese Big Four audit firms. Personal actions and firm-wide measures to proactively deal with stress were elicited from audit staff, and their effectiveness was evaluated. DESIGN: A two-phase sequential mixed-methods approach was employed to achieve the objectives of this study. In the first phase of data collection, questionnaires were distributed to auditors in Big Four firms in Malta, and concurrent semi-structured interviews were conducted with thirteen audit staff members. Subsequently, in the second phase of data collection, the quantitative and qualitative data was analysed in detail and discussed in semi-structured interviews with four audit partners from Big Four audit firms. FINDINGS: This study found that role stressors increase burnout levels, while resilience mitigates burnout. Consequently, burnout leads to lower job satisfaction, strained relationships with colleagues, higher turnover intentions, and higher RAQP. Furthermore, results provided evidence that more experienced auditors engage in fewer RAQP. Although RAQP were rarely committed intentionally, they are prevalent when auditing low-risk areas under time pressure. Audit staff believe that maintaining a healthy lifestyle and a work-life balance improve audit quality by increasing motivation. Firm-wide measures include hiring more quality staff, flexibility, and better communication, which reduce stress and RAQP. However, audit partners believe that resilience could only be enhanced through experience. CONCLUSIONS: Maltese auditors in Big Four firms regularly experience time pressures, which is one of the leading causes of burnout and RAQP. The high incidence of underreporting of time explains why insufficient staff are allocated to engagements, which increases role stress further. More experienced auditors should be hired, trained, and retained to prevent RAQP. VALUE: This study contributes to the understanding of the antecedents and consequences of burnout amongst Maltese auditors, and other causes of RAQP. Several recommendations to reduce stress, burnout, and RAQP are also put forward.