Client Workplace Environment and Corporate Audits

53 Pages Posted: 24 Jan 2017 Last revised: 16 Oct 2021

See all articles by Minjie Huang

Minjie Huang

University of Louisville - Department of Finance

Adi Masli

University of Kansas - School of Business

Felix Meschke

University of Kansas - Finance Area

James P. Guthrie

University of Kansas - School of Business

Date Written: October 27, 2016

Abstract

We obtain a novel dataset of workplace satisfaction ratings submitted by about 100,000 employees working for large public U.S. companies. We document that lower workplace ratings are associated with higher audit fees and longer audit report lags. Lower workplace ratings also increase the likelihood of firms receiving modified going concern opinions. Our study shows that organizational workplace environments affect auditor risk assessments and auditing outcomes and provide insights for practicing auditors and corporate executives. Our interviews with practicing auditors at large U.S. accounting firms also provide insights as to how workplace quality affects the corporate audit.

Keywords: workplace environment, audit fees, going concern opinions, audit report lag

JEL Classification: G3, J28, M14, M42

Suggested Citation

Huang, Minjie and Masli, Adi and Meschke, Felix and Guthrie, James P., Client Workplace Environment and Corporate Audits (October 27, 2016). Auditing: A Journal of Practice & Theory, 2017, Vol. 36, pp. 89-113, Available at SSRN: https://ssrn.com/abstract=2902912

Minjie Huang (Contact Author)

University of Louisville - Department of Finance ( email )

College of Business
Harry Frazier Hall
Louisville, KY 40292
United States

Adi Masli

University of Kansas - School of Business ( email )

1300 Sunnyside Avenue
Lawrence, KS 66045
United States

Felix Meschke

University of Kansas - Finance Area ( email )

Capitol Federal Hall
1654 Naismith Drive
Lawrence, KS 66045
United States
(347) 433-5495 (Phone)

HOME PAGE: http://www.business.ku.edu/faculty/meschke-felix/

James P. Guthrie

University of Kansas - School of Business ( email )

1300 Sunnyside Avenue
Lawrence, KS 66045
United States

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