Can auditors’ work-life balance impact their
delivered audit quality?
Thesis MSc Accountancy
University of Groningen
Faculty of Economics and Business
June 19, 2020
Kristel Hormann
s2951258
Supervisor: D. Veltrop
Word count: 10,790
Can auditors’ work-life balance impact their delivered audit
quality?
ABSTRACT
Over the past few years, severe criticism has been directed at the audit profession and multiple studies stress the importance of high-quality audits. However, a severe problem for many auditors in carrying out their work, is that they have to balance high work demands with their personal life. In other words, work-life conflict is an important issue for auditors, both for themselves as for the quality of their work. In this study I try to examine under which circumstances auditors’ work-life conflict undermines audit quality. Based on previous research and existing theories, I expect that auditors’ work-life conflict reduces their job satisfaction, which may result in inadequate work performance – auditors engaging in audit quality threatening behaviour. Furthermore, as previous research has highlighted the importance of auditors’ professional identity, I expect that auditors who strongly identify with their profession are less likely to suffer from work-life conflict and are less likely to engage in quality threatening behaviour. Regression analyses were used to analyse data from surveys which were completed by 170 Dutch auditors. The results indicate that work-life conflict indeed decreases job satisfaction and, via reduced job satisfaction, increases audit quality threatening behaviour. However, I did not find any evidence for the proposed moderating effects of auditor professional identification. In conclusion, these results partly confirm my expectations and highlight the negative impact of work -life conflict and job dissatisfaction on audit quality threatening behaviour.
Keywords: Auditors; Work-life Conflict; Job Satisfaction; Audit Quality Threatening
TABLE OF CONTENT
I. Introduction
p. 3
II. Literature review and hypothesis development
p. 7
Audit Quality Threatening Behaviour
p. 7
Auditors’ work-life conflict
p. 8
Auditors’ job satisfaction
p. 10
Auditors’ professional identification
p. 13
III. Methodology
p. 16
Sample and data collection
p. 16
Measures
p. 16
Data-analysis
p. 18
IV. Results
p. 20
Demographics of the sample
p. 20
Descriptive statistics and correlation analysis
p. 21
Hypotheses testing
p. 23
V. Discussion and Conclusion
p. 28
Practical implications
p. 30
Limitations and future research
p. 31
I. INTRODUCTION
Over the past few years, severe criticism has been directed at the audit profession (Humphrey, Canning & O’Dwyer, 2018). According to the 2017 inspection report of the Dutch Authority of Financial Market (AFM), the number of statutory audits performed that are qualified as ‘inadequate’ at each of the Big 4 audit firms is too high; 19 of the 32 inspected statutory audits were qualified as ‘inadequate’. These findings are similar to the conclusions of the International Forum of Independent Audit Regulators (IFIAR), which concluded in its report of March 2017 that the percentage of inspected audits with significant findings continued to be unacceptably high (AFM 2017a, p.5). Thereby, scholarly research stresses the importance of high-quality audits (Knechel, 2016; Skinner & Srinivasan, 2012). Accounting and auditing scandals, such as Enron, WorldCom and Satyam have further heightened the need for auditors to deliver high quality audits (Bhasin, 2013).
Underlining the importance of high-quality audit work and in response to these scandals, increasingly strict and more extensive auditing standards are an important way in attempting to ensure high quality audits (Knechel, 2013). However, apart from extensive auditing standards, there are many other inputs to audit quality. Ultimately, high quality audit work depends on how individual auditors carry out their work (IAASB 2011; Christensen, Glover, Omer & Shellery, 2016). An increasing problem for auditors in the current day and age, however, is the combining the ever increasing work demands – in part due to more strict regulation (Knechel, 2013) – with home obligations (Yustina & Valerina, 2018). Surprisingly, to date, scholarly attention on how work-life conflict impacts the quality of audit work has remained fragmented at best. In my thesis I bring to the force how this underacknowledged element, work-life conflict, may impact the quality of auditor work. The quality of audit work will be measured by the engagement in audit quality threatening behaviour, which can be defined as a poor execution of an audit procedure that reduces the level of evidence gathered for the audit, so that the collected evidence is unreliable, false or inadequate quantitatively or qualitatively (Herrbach, 2001).
Auditor work-life conflict is an important issue, not only because auditors are faced with increasing demands due to extensive regulation, but also because scholarly research recognises excessive auditor workload as an increasingly difficult topic (Persellin, Schmidt, Vandervelde & Wilkins, 2019). A professional accountant has one of the most stressful jobs in the financial services industry (Fogarty, Singh, Rhoads & Moore, 2000). The reason behind this is that accountants are always confronted by depressed conditions caused by their work (PCAOB,
2013). Auditors suffer a heavy workload (Yustina & Valerina, 2018) and in addition to managing these high work demands, they also have to balance their work with their personal and family life.
In a society filled with conflicting responsibilities, chaotic roles and commitments, the balance between paid work and other activities of life has become a predominant issue at the workplace (Lockwood, 2004). Work-life conflict arises when an individual’s work and non-work roles are incompatible (Greenhaus & Beutell, 1985). Demands placed in one role can spill over and affect another role (Netemeyer, Boles & Murrian, 1996). According to Ahuja, Chudoba, Kacmar, McKnight & George (2007), perceived work overload significantly influences work-life conflict. Such a conflict is more likely to occur when one has too much work to do and not enough time to do it (Geurts, Kompier, Roxburgh & Houtmann, 2003). Imbalance of work-life relationships can lead to severe health problems and hamper job performance (Singh, 2010). Work-life conflict has been tied to attitudinal, behavioural and health-related outcomes in employees. It has an impact on health because it is stressful, and it can deplete resources necessary to engage in health-related behaviour (Gisler, Omansky, Alenick, Tumminia, Etough & Johnson, 2018).
Evidence indicates that policies designed to assist work/non-work conflict can promote employee behaviour that is beneficial to the firm (Allan, Loudon & Peetz, 2007). Thereby, research on audit quality shows that work-life balance is associated with audit quality and, hence, improving the work-life balance may ameliorate audit quality (Khavis & Krishnan, 2017). Consequently, maintaining a poor work-life balance might thus increase auditors’ engagement in audit quality threatening behaviour. Therefore, in this paper I will examine the relationship between work-life conflict and audit quality threatening behaviour.
Auditors experiencing a high level of work interfering with their private life, tend to feel emotionally exhausted toward their current profession (Yustina & Valerina, 2018). This emotional exhaustion is always associated with fatigue and feelings of being emotionally drained, due to exaggerated psychological demands (Fogarty et al., 2000). When individuals feel emotionally exhausted, they will be dissatisfied with their job. (Cordes & Dougherty, 1993). Job satisfaction can be defined as the positive feeling about one’s job resulting from an evaluation of its characteristic (Robbins & Judge, 2007). It can be seen as a result of employees’ perception of how well their job provides those things they regard as important (Kanwar, Singh & Kodwani, 2009). Job satisfaction leads to greater organisational commitment (Marsh & Mannari, 1977), which has in turn a positive influence on dysfunctional audit behaviour. Hence, an important reason why work-life conflict would increase engagement in quality threatening
behaviour could be the decrease of job satisfaction. Therefore, I anticipate that job satisfaction mediates the relationship between work-life conflict and audit quality threatening behaviour.
In seeking an answer to the question when work-life conflict is likely to undermine the quality of auditors’ work, I anticipate that the answer to this question may lie in the auditors’ professional identity. Professional identification refers to the extent to which a professional employee experiences a sense of oneness with the profession (Turner, Hogg, Oakes, Reicer & Wetherell, 1987). Auditors’ sense of oneness with the profession can function as a buffer against certain kinds of stressors (Thoits, 1995) and might thus weaken the positive relationship between auditors’ work-life conflict and audit quality threatening behaviour (Thoits, 1995). According to Caza (2007), professionals who are highly professionally identified will experience less energy loss when faced with challenging circumstances, because they attribute greater value to the outcome of the challenge. Thus, auditors with high professional identification will experience less strains when facing work-life conflict, which will decrease the engagement in audit quality threatening behaviour.
In this research I will try to find an explanation for the difference between high performing auditors and other auditors. The effect of work-life conflict on audit quality, through the impact on auditors’ job satisfaction will be studied. Besides, I will examine whether auditor’s professional identity has a moderating effect on both the proposed relationship between work-life conflict and job satisfaction as the proposed relationship between job satisfaction and audit quality threatening behaviour. My overall research question will be:
Why and when does auditors’ work-life conflict impact audit quality threatening behaviour?
This research is expected to deliver a contribution to the existing literature by specifically investigating the influence of work-life balance on job satisfaction in the audit sector, and thereby the influence on audit quality. The fact that auditors have one of the most stressful jobs in the financial services industry (Fogarty et al., 2000) makes it interesting to study the relationship between work-life balance and job satisfaction in this specific industry. The findings of this study will offer valuable information to the managers of the accounting firm, since managers can use the information to improve the quality of the audit by improving the quality of work delivered by the individual auditors working on an engagement. In order to achieve this, the findings of this study might help managers to analyse work-life conflict for individual auditors at all stages of their audit careers.
The remainder of this paper will be organized as follows. First, a theoretical framework will be provided. Thereafter, I will elaborate on the method section. Then, the results of the analyses will be discussed. Finally, I will conclude with a discussion and provide limitations of this study and possibilities for future research.
II. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
Audit Quality Threatening Behaviour (AQTB)
Audit quality is a big topic within the audit literature. Audit services are demanded as monitoring devices because of the potential conflicts of interest between owners and managers as well as those among different classes of security holders (Benston, 1985). According to the US Securities and Exchange Commission (2013), auditors serve as “critical gatekeepers in the financial reporting process” and play an essential role in the efficient functioning of capital markets worldwide. The independent auditor is charged with the responsibility to impartially examine a firms’ financial statements and either confirm that these have been prepared in accordance with generally accepted accounting principles (GAAP) or issue an opinion stating otherwise. This way, they provide assurance that a firm’s financial statements present a “true and fair” view of the company’s financial performance and position (Moore, Tetlock, Tanlu & Bazerman, 2006). Moreover, audit quality is also a fundamental element of the competitive game between audit firms (Moizer, 1997). According to Herrbach (2001), any practice that has the potential to vitiate the quality of financial audits is of interest to management, investors, regulators, the audit firm itself and any other stakeholder who may rely on these opinions. The quality of audit services is defined to be “the market-assessed joint probability that a given auditor will both (a) discover a breach in the client’s accounting system and (b) report the breach” (DeAngelo, 1981, p. 186).
However, audit quality is characterized by a strong ambiguity that makes it hardly demonstrable (Herrbach, 2001). Unlike many other economic activities – where quality can involve precise and relatively objective criteria allowing to define and measure it – audit quality is problematical both for internal as for external financial statement users (Warming-Rasmussen & Jensen, 1998). Past research uses different approaches to measure audit quality. Common approaches involve earnings management indicators, restatements and auditor reporting (Knechel, Krishnan, Pevzner, Shefchik & Velury, 2013). However, if the audit process and the behaviour of auditors in the audit process are of key interests, an alternative approach to capture dimensions of audit quality is to ask auditors about the undertaking of quality reducing acts. When an auditor fails to report a breach within the financial statements, the auditor is conducting dysfunctional audit behaviour (Svanström, 2016). Performing questionable audit practices jeopardizes the validity of the financial statements which is a concern and is of interest for the stakeholders (Smith, Emerson & Boster, 2018).
Audit quality reduction behaviour has been researched multiple times (e.g. by McNair, 1991; Otley & Pierce, 1996) and Herrbach (2001) used these studies in order to develop a measure of auditor behaviour that influences the quality of the audit. Quality Threatening Behaviour (QTB) can be defined as “poor execution of an audit procedure that reduces the level of evidence gathered for the audit, so that the collected evidence is unreliable, false or inadequate quantitatively or qualitatively” (Herrbach, 2001, p. 790). This kind of evidence might not provide a true and fair view of the financial statements, resulting in lower audit quality. Examples of audit quality threatening behaviours are: a reduction of work below what would be considered reasonable; superficial review of clients documents; acceptance of weak client explanations; failure to research an accounting principle; failure to pursue a questionable item; and a false sign off (Herrbach, 2001). A different term used in literature to describe these behaviours is Reduced Audit Quality Practices (RAQP) (Smith & Emerson, 2017; Smith et al., 2018).
This audit quality threatening behaviour thus threatens the quality of the audit and has potentially serious consequences for the audit firms and profession (Pierce and Sweeney, 2006). Acts associated with this behaviour are of concern to the profession because they appear to be systemic, since prior research indicates that more than half of auditors admit to engaging in at least one of the aberrant behaviours (Smith & Emerson, 2017). Individually or collectively, engaging in such audit quality threatening behaviour does not necessarily presume that the audit opinion will be compromised. However, by lowering the care and scepticism involved in auditing, they do have the potential to endanger its validity (Herrbach, 2001). A considerable stream of research has involved investigating these dysfunctional audit behaviours, and much of it has shown a link between these behaviours and pressures as perceived by the auditor (Otley & Pierce, 1996). At a fundamental level, these pressures arise as a result of the tension between a need to provide a quality investigation and the costs necessary to do so (Smith & Emerson, 2017).
Auditors’ work-life conflict
In addition to managing pressures at work, auditors also have to balance their work with their personal and family life. Integration of personal and professional life has increasingly become important due to the changing lifestyle over times, competition for growth and changing patterns of work, family and business (Joplin, Shaffer, Francesco & Lau, 2003). Work-life conflict is generally defined in the literature as occurring when the emotional and behavioural demands of work and non-work roles are incompatible, such that participation in
one role is made more difficult by virtue of participation in the other (Greenhaus and Beutell, 1985). On the other hand, it’s also possible to maintain a good balance between these domains. The engagement in multiple roles with an approximate equal level of attention, time, involvement or commitment is called work-life balance (Greenhaus, Collins & Shaw, 2003). This definition focuses on the fulfilment of different roles. Other definitions of work-life balance can be categorized in terms of engagement in multiple roles in work and nonwork life (Sirgy & Lee, 2018). Noon & Blyton (2007) describes work-life balance as “the ability of individuals to pursue successfully their work and non-work life, without undue pressures from one domain undermining the satisfactory experience of the other” (p. 356).
Research found that work-related role stress (role conflict and role ambiguity) is interrelated with conflict between work and family responsibilities (Good et al., 1996). The conflict perspective in research about this topic is derived from a scarcity hypothesis that assumes a fixed amount of time and human energy. Proponents of the conflict perspective assume that individuals who participate in multiple roles (such as work and family) inevitably experience conflict and stress that detracts from their quality of life (Greenhaus & Powell, 2006). This phenomenon is called role conflict, which Kahn, Wolfe, Quinn, Snoek & Rosenthal (1964) defined as “the simultaneous occurrence of two (or more) sets of pressures such that compliance with one would make more difficult compliance with the other” (p. 19). In general, research has demonstrated that work-life balance focuses on engagement and involvement across various social roles in multiple life domains. The more the individual is engaged and committed to his or her various social roles, the more likely it is that he or she would experience positive behavioural outcomes such as life satisfaction (Sirgy & Lee, 2018).
A lot of research has been done concerning the consequences of work-life balance and work-life conflict. Studies highlighting the link between work-life conflict and physical complaints are well documented in the research literature (Allan et al., 2007). Hyman, Baldry, Scholarios & Bunzzel (2003) found that intrusion of work obligations into their personal lives can negatively affect health of employees. A lack of balance between work and non-work activities is related both to reduced psychological as well as reduced physical well-being (Sparks, Cooper, Fried & Shirom, 1997). Work-life balance can play an important role in improving individual well-being such as health satisfaction, family satisfaction and overall life satisfaction (Corey, 2002). Thereby, work-life conflict has also been found to influence the health and well-being of workers’ family members such as partners and children (Allan et al., 2007).
Furthermore, evidence indicates that policies designed to assist work/non-work conflict can promote employee behaviour that is beneficial to the firm. (Allan et al., 2007). Research has shown that work-life balance leads to high organisational performance, increased job satisfaction and stronger organisational commitment (Allen, Herst, Bruck & Sutton, 2000). Taking these outcomes into the auditing industry, Yustina & Valerina (2018) indeed found that work-family conflict significantly affects job performance of auditors. Since the quality of audit works between the auditors is determined by their job performance (Lee, Su, Tsai, Lu & Dong, 2016), I expect a positive relationship between auditors’ work-life conflict and audit quality threatening behaviour, resulting in the first hypothesis of this study:
Hypothesis 1: Auditors’ work-life conflict is positively related to audit quality threatening behaviour
Auditors’ job satisfaction
As noted earlier, auditors experiencing high level of work interfering with their private life tend to feel emotionally exhausted toward their profession (Yustina & Valerina, 2018). Exhaustion is different from stress, because stress potentially has a positive influence on work-related outcomes. Conversely, exhaustion produces only negative consequences for employees and the organisation (Jones, Norman & Wier, 2010). Being emotionally exhausted makes auditors dissatisfied with their job (Cordes & Dougherty, 1993). Job satisfaction can be defined as “the extent to which people like (satisfaction) or dislike (dissatisfaction) their jobs” (Spector, 1997, p. 2). This can be seen as a result of employees’ perception of how well their job provides for things they regard to be important (Kanwar et al., 2009). Choi & Kim (2012) define job satisfaction as an understanding of employees’ feelings at the workplace and how much they like their current profession, which are really important in-service organisations.
Job satisfaction can be achieved when an individual perceives that his or her job is in line with the values that the individual considers to be important, and dissatisfaction occurs when the job and values are contradictory (Fisher, 2001). When someone’s job is not in line with their desires or important values (e.g. family and work), they will not be able to achieve satisfaction in their job. Thus, when their job brings out conflict between those domains, individuals will suffer from less job satisfaction (Yustina & Valerina, 2018). This phenomenon can be explained by the ‘spillover’ model. In this model, a positive relationship is proposed between work and non-work roles to the extent that satisfaction or dissatisfaction in one role spills over into the other role (Loscocco & Roschelle, 1991).
In line with this, Mas-Machuca, Berbegal-Mirabent & Alergre (2016) found a positive relationship between employee work-life balance and job satisfaction. This study took into account any type of activity conducted outside of work, which could be leisure activities, family time or others that both men and woman might enjoy. A study by Kanwar et al. (2009) conducted in the context of high-tech service industries also found a positive relationship between work-life balance and job satisfaction. Thereby, Nayeem & Tripanthy (2012) found the same positive relationship among teachers of technical institutions. In addition to this, a study by Hughes & Bozioneles (2007) investigated this relationship among male bus drivers and found that work-life imbalance was the major source of dissatisfaction for the participants. According to Pasewark and Viator (2006), job satisfaction is the most general consequence examined in work-family conflict research.
There has not yet been a lot of research about this topic within the auditing industry. However, Persellin et al. (2019) investigated audit workloads, audit quality and job satisfaction and found a negative relationship between audit workloads and job satisfaction when workloads exceed a threshold that is perceived to impair audit quality. Additionally, Yustina & Valerina (2018) found that job satisfaction negatively mediates between the relationship of work-family conflict and job performance of auditors, meaning that when a work-family conflict exists, job performance is decimated/reduces.
Thus, research shows a lot of examples of a positive relationship between work-life balance - the opposite of work-life conflict - and job satisfaction in different work fields. Also, a negative relationship between work-family conflict and job satisfaction within the auditing industry is given. Taking this into account, I expect a negative relationship between work-life conflict and job satisfaction in the auditing industry. This brings us to the second hypothesis of this study:
Hypothesis 2: Auditors’ work-life conflict is negatively related to auditors’ job satisfaction
There also has been a lot of research concerning the relationship between job satisfaction and job performance. For example, both Judge, Thorensen, Bono & Patton (2001) as Susanty & Rizqi (2013) found a strong correlation between job satisfaction and employee’s job performance. The relationship between job satisfaction and job performance has also been researched within the audit industry. Masihabadi et al. (2015) found a negative relationship for job satisfaction and organisational commitment of auditors as a mediator in the relationship
between job stress and job performance. Thereby, as already mentioned, Yustina & Valerina (2018) found evidence for a mediating effect of job satisfaction on the relationship of work-family conflict with job performance of auditors. According to Lee et al. (2016), the job performance of an auditor is highly related with audit quality. Auditors with poor job performance will produce a low audit quality which could lead to the production of substandard auditing. Auditors are considered as actors who also have no exception whereby various factors could affect their performance (Mahdavi & Daryaei, 2017). Thus, auditors’ job performance could be interpreted as audit quality and has been measured from various perspectives such as effectiveness and efficiency of auditors in conducting audit procedures and decision-making performance (Johari, Ridzoan & Zarefar, 2019).
As noted earlier, a commonly used approach to capture audit quality is to investigate auditors’ quality reducing acts (Svantröm, 2016). Hence, it might be possible that auditors who perceive a reduced level of job satisfaction will be more likely to show audit quality threatening behaviour. An important explanation for this could be that greater job satisfaction leads to greater organisational commitment (Marsh & Mannari, 1977). According to Kusumastuti & Nirmala Arum Janie (2014), organisational commitment has a positive and significant influence on dysfunctional audit behaviour.
Based on above, I hypothesise that that auditors who are less satisfied with their job would be more likely to engage in audit quality threatening behaviour. This expectation is formulated in the third hypothesis of this study:
Hypothesis 3a: Auditors’ job satisfaction is negatively related to audit quality threatening behaviour
In addition, the assumption that the positive relationship between auditors’ work-life conflict and audit quality threatening behaviour is mediated by auditors’ job satisfaction brings us to the following hypothesis:
Hypothesis 3b: Auditors’ job satisfaction mediates the relationship between auditors’ work-life conflict and audit quality threatening behaviour
However, it is possible that not all auditors might deal with work-life conflict and a decreased job satisfaction in the same way. Therefore, the question remains why some auditors would handle the consequences of work-life conflict better than others. In seeking an answer to this question, I expect that auditors’ professional identification may explain why some auditors are better able to deal with the consequences of work-life conflict.
Auditors’ professional identification
Professional identity refers to the extent to which a professional employee experiences a sense of oneness with the profession and commitment to and acceptance of the requirements for the independence and ethical values of the profession (Broberg , Umans & Skog, 2018). This term is derived from social identification, which is the process by which individuals define themselves in terms of a social category (Turner, 1985). Identification conveys a sense of not only who one is, but of belonging and security (Ashforth, Josi, Anand & O’Learly-Kelly, 2013). Professional employees vary in the extent to which they identify themselves with their profession. They tend to maintain dual social identities, one associated with their organisation and the other associated with their profession (Bamber & Iver, 2002). Some professionals view themselves as professionals first and foremost and organisational members second; others hold the opposite view; and still others see the profession and the organisation as more or less equally self-defining (Johnson, Morgeson, Ilgen, Meyer & Lloyd, 2006).
Another, more general term that can be used for this phenomenon is ‘occupational identity’. Occupational identity refers to how the members of an occupation are defined as a collectivity, including their recurring tasks, the discourses used to make sense o f their work, as well as their values, goals, beliefs, stereotypic traits, and knowledge, skills , and ability (Ashforth, Harrison & Corley, 2008). Identification is thus more than a superficial social categorisation, it is a visceral sense that what it means to be is taken to heart as a reflection of whom one “is” (Ashforth et al., 2013).
Following this theory, auditors will likely identify with their profession (Bamber & Yver, 2002). When professional workers become identified with their profession, th ey will incorporate professional attributes and values into conceptions of his or her self -identity (Loi, Hang-yue & Foloy, 2004). An auditor’s professional identification thus influences work, attitudes, affections and behaviour (Siebert & Siebert, 2005). Thereby, professional identification can serve as a source of collective inspiration, energy and strength (Russo, 1998). According to Caza (2007), professionals who are highly professionally identified
will experience less energy loss when faced with challenging circumstances, because they attribute greater value to the outcome of the challenge. Thereby, auditors’ sense of oneness with the profession can function as a buffer against certain kinds of stressors (Thoits, 1995).
Finally, for strongly professionally identified auditors, their work life is a more important part of who they are than for less professionally identified auditors (Roth bard & Edwards, 2003). This would mean that highly identified auditors are less likely to have their job satisfaction reduced from work-life conflict, simply because their work as an auditor is a more central part of who they are. On the other hand, for lowly professionally identified auditors, work-life conflict is more likely to undermine their job satisfaction, because for these auditors their work is less likely to define who they are. For these low professionally identified auditors, work-life conflict is more likely to undermine their satisfaction in their work.
Subsequently, I expect that highly professionally identified auditors will experience less job satisfaction when work-life conflict is high compared to low professionally identified auditors, leading us to the following hypothesis:
Hypothesis 4: The negative relationship between work-life conflict and auditors’ job satisfaction is moderated by auditors’ professional identification, such that the negative
relationship is weaker when auditor professional identification is high
In addition, according to research, auditors with a stronger professional identity emphasize aspects such as autonomy, independence, professional judgement and public interest activities (Bamber & Yver, 2002). In other words: auditors with a higher professional identification will have a higher commitment to uphold professional standards (Broberg et al., 2018).
Professional identification can be seen as part of a broader term - professional commitment - which has been considered in terms of dedication to a professional career, identification with the profession, and acceptance of the profession’s goals and ethics (Sorensen & Sorensen, 1974). In the accounting literature, it has been described with reference to a believe in and acceptance of the goals and values of the profession, a willingness to exert considerable effort on behalf of the profession, and a desire to maintain membership of the profession (Herda & Martin, 2016). Therefore, according to Lord & Dezoort (2001), high professional commitment should orient auditors toward behaviour that is in the public interest and away from behaviour that has the potential to damage the profession. Given that professional
identification can be considered as a part of professional commitment, I expect highly professionally identified auditors to act the same way as auditors that are highly professionally committed. This could imply that, despite the feeling of less satisfaction in their jobs, highly professionally identified accountants would be more willing to uphold professional standards, resulting in less quality threatening behaviour.
In summary, I expect that highly professionally identified auditors will engage in less quality threatening behaviour when suffering from low job satisfaction compared to lowly professionally identified auditors, resulting in the fifth hypothesis:
Hypothesis 5: The negative relationship between auditors’ job satisfaction and audit quality threatening behaviour is moderated by auditors’ professional identification such that the
negative relationship is weaker when auditor professional identification is high
Bringing all these variables together will lead us to the last hypothesis of the study:
Hypothesis 6: The indirect effect of auditors’ work-life conflict on audit quality, through the impact on auditor’s job satisfaction, is contingent on auditors’ professional identification.
Figure 1 presents the conceptual model of this study.
III. METHODOLOGY
Sample and data collection
This study relies on data gathered from employees of Dutch auditing firms who were personally approached by a one of a group of six auditing master students. Convenience sampling was used to approach auditors with at least two years of auditor experience with the request to fill out a questionnaire. Prior to the survey, the students gathered the following information from the participants: e-mail, gender, position, the accountancy firm of the participant and the location of this firm. The web-based survey was distributed via e-mail. The survey was sent out and followed up with two rounds of reminders. On April 2nd 2020, the auditors received the invitation link to the survey. One week after the initial mail was sent out, they received a first reminder and a second reminder was sent out by the students after two weeks. Of the 201 auditors who initially agreed to participate, 177 auditors (88%) completed the questionnaire. However, the data of 7 auditors was removed because they indicated in the survey to perform compilation practices instead of assurance, leaving us with a sample of 170 auditors. All participants were assured that their responses would be confidential and used for research purposes only.
Measures
Dependent variable
Audit Quality Threatening Behaviour (AQTB) can be defined as poor execution of an audit procedure that reduces the level of evidence gathered for the audit, so that the collected evidence is unreliable, false or inadequate quantitatively or qualitatively (Herrbach, 2001). It was measured using a scale adapted from Herrbach (2001) and Otley & Pierce (1995). This scale represents eight quality threatening behaviours that may be encountered during an audit engagement, namely: (1) reduction of work below what is considered reasonable, (2) superficial review of client document, (3) acceptance of weak client explanation, (4) failure to research an accounting principle, (5) failure to pursue a questionable item, (6) signing off an audit programme step without completing the work, (7) greater than appropriate reliance on client work, and (8) personally engaging in underreporting of time. For each item auditors had to indicate how often they had acted in the following manner during the last month on a seven-point scale (1=never; 7=very often). The Cronbach’s alpha of this variable was .802.
Independent variable
Work-life conflict can be defined as occurring when the emotional and behavioural demands of work and non-work roles are incompatible, such that participation in one role is made more difficult by virtue of participation in the other (Greenhaus & Beutell, 1985). Auditors’ work-life conflict was measured using an adapted work-family conflict scale from Netemeyer, et al. (1996). The questions were adapted to reflect a home rather than family situation. Traditionally, work-life conflict has been seen through the lens of woman employment. Later on, it broadened its horizons to men’s and women’s negotiation of the demands from paid employment and personal and domestic life. This concern has changed from the work-family to the work-life interface (Nayeem & Tripathy, 2012). Following the research of Greenhaus & Powell (2006), I wanted to take into account any type of activity conducted out of work, whether leisure activities, family time or other activities that people might enjoy (Greenhaus & Powell, 2006). The adapted items read: “the demands of my work interfere with my home and family life”; “the amount of time my job takes, makes it difficult to fulfil family responsibilities”; “things I want to do at home do not get done because of the demands my job puts on me”; “my job produces strain which makes it difficult to fulfil home duties”; and “due to work-related duties, I have to make changes to my plans for activities at home”. A seven-point Likert scale was used, ranging from (1) strongly disagree to (7) strongly agree. The Cronbach’s alpha was .899.
Mediator variable
Auditors’ job satisfaction is defined as an understanding of employees’ feelings at the workplace and how much they like their current profession (Choi &Kim, 2012). In this study this was measured by a scale developed by Hackman & Oldham (1976). The items read: “Generally speaking, I am very satisfied with my job”; “I am generally satisfied with the feeling of worthwhile accomplishment I get from doing this job”; and “I am generally satisfied with the kind of work I do in my job”. I used a seven-point Likert scale, ranging from (1) strongly disagree to (7) strongly agree. The Cronbach’s alpha was .809.
Moderator variable
Professional identification can be defined as the extent to which a professional employee experiences a sense of oneness with the profession and commitment to and acceptance of the requirements for the independence and ethical values of the profession (Broberg et al., 2018). Auditors’ professional identification was measured by the scale taken from Bamber & Iyer
(2002). In line with Russo (1998), they adapted the organisational identification scale to a professional orientation to measure professional identification. The adapted items read: “when someone criticizes the audit profession, it feels like a personal insult”; “I am very interested about what others think about the audit profession”; “when I talk about the audit profession I usually say ‘we’ rather than ‘they’”; “the audit profession’s successes are my successes”; and “when someone praises the audit profession, it feels like a personal compliment”. Subjects responded to a seven-point Likert scale ranging from (1) strongly disagree to (7) strongly agree. The Cronbach’s alpha was .785.
Control variables
Prior organisational research suggests that key demographic factors such as gender, age and work experience are related to a number of work outcomes (Smith et al., 2018). Age and gender might influence one’s ethical decision-making ability (Clarke et al., 1996), which might contribute to their engagement in audit quality threatening behaviour. I will thus control for these possible effects. Work-experience will be measured by tenure and perceived seniority. Age and work experience will be both measured in years. Gender is a dummy variable where 0 represents female and 1 represent male. I further included a Big-four dummy variable where 0 means the auditor works at a big-four firm and 1 means the auditor does not work at a big-four firm, because according to prior research, big four firms might produce higher audit quality than non-big four firms (Francis, 2004). Moreover, since previous research finds that employees with higher family demands, captured by having children living at home have greater work-family strains (Michel et al., 2011), I also control for a children dummy where 0 means the auditor has no children and 1 means the auditor does have one or more children.
Data-analysis
Data analyses were performed to determine the direction and the extent of the relationships of auditors’ work-life conflict, job satisfaction, AQTB and professional identification. The data-analysis began with an examination of the sample characteristics (table 1 and table 2). After this, a reliability analysis has been conducted by computing the Cronbach’s alpha. Also, I conducted a correlation analysis for each of the variables to get an indication whether the variables are related or not. This analysis has been conducted using IBM SPSS Statistics 26 software and is shown in section 4: “Results”. In order to further test the hypotheses, a multiple regression analysis has been conducted. The analyses were conducted using the dataset retrieved from the respondents to the survey. I used the multiple regression
analysis to assess the diverse relationships simultaneously, controlling for relevant variables (gender, age, tenure, big four, children and seniority). Furthermore, I controlled for the mediator using the regression PROCESS tool (model 4), developed by Hayes (2018). This tool was used because it can generate direct and indirect bootstrapped effects in a mediation model (Hayes, 2018). Eventually, I also used the PROCESS tool (model 58) to test the full model.
IV. RESULTS
Demographics of the sample
Table 1 presents the distribution of the characteristics of the sample. The majority of the auditors who participated in the study were male (71.8%). Furthermore, the sample consists mostly of auditors aged 30 or younger: 7.6% under 25 years, 50.6% between 26 and 30 years old. Most auditors have a tenure between 5 and 15 years (43.5%). Thereby, most auditors have a full-time contract (87.1%), which means they work more than 36 hours a week. Most auditors who participated perceive their seniority as medior (22.5%) or senior (28.8%) and work at a big four audit firm (82.9%). Lastly, most respondents have no children (67.6%). According to the NBA, the percentage of women in the sample (28.2%) is representative for the audit profession as a whole (Accountant, 2018). Since all auditors in the sample have two or more years of experience as an auditor, it is expected that the auditors within the sample have enough working experience to form properly substantiated opinions about aspects such as audit quality threatening behaviour (AQTB), their perceived job satisfaction and how they perceive work-life conflict.
Descriptive statistics and correlation analysis
Table 2 shows the mean, median, standard deviation, minimum and maximum of all variables of the model. In addition to the information given in table 1, it shows that the average age of the sample was 32.8 and that the average tenure of the sample was 7.7. Most importantly, table 2 shows that the average auditor in the sample perceives a work-life conflict above the midpoint (M = 4.122). However, the average auditor is relatively satisfied with his or her job (M=5.355). Furthermore, the average auditor admitted engaging in relatively few audit quality threatening behaviour (M = 2.493). Lastly, the average auditor of the sample perceives a relatively high sense of professional identification (M = 4.581). Table 3 presents the correlation between all the variables. The inter-scale correlations show the expected direction of association and all are significant at the p < 0.01 level, except for work-life conflict and AQTB. According to table 3, work-life conflict and job satisfaction are highly correlated (r = -.331, p < 0.01), indicating that a higher work-life conflict might lead to lower job satisfaction among auditors. Furthermore, job satisfaction and AQTB are highly correlated (r = -.230, p < 0.01), which indicates that job satisfaction might influence on AQTB. However, against my predictions, the correlation between work-life conflict and AQTB shows no significance at the p < 0.01 level (r=.026). In addition, table 3 shows a significant relationship between AQTB and
gender (r = -.099, p<0.01), and a significant correlation between AQTB and children (r = -.158, P < 0.05). Furthermore, table 3 shows a significant relationship between work-life conflict and the big four dummy and seniority. Also, there is a significant relationship between job satisfaction and age, tenure, children and seniority.
Table 1
Distributions of demographic sample
Characteristic Frequency Percentage Characteristic Frequency Percentage
Gender - Contract Male 122 71.8% Part-time 22 12.9% Female 48 28.2% Full-time 148 87.1% Age - - Seniority < 25 13 7.6% Junior 16 9.4% 26-30 86 50.6% Medior 57 33.5% 31-35 28 16.5% Senior 49 28.8% 36-45 25 14.7% Very senior 22 12.9% 46-55 17 10.0% Partner 25 14.7%
56-65 1 0.6% Big four dummy
Tenure Non big four firm 29 17,1%
< 2 10 5.9% Big four firm 141 82.9%
2-4 64 37.6% Children dummy
5-15 74 43.5% No children 115 67.6%
> 16 21 12.4% Children 55 32.4%
Table 2
Descriptive Statistics
Variable Mean Median Standard
Deviation Minimum Maximum Work-life conflict 4.122 4.200 1.2947 1.0 7.0 Job satisfaction 5.355 5.667 .894 1.67 7.0 AQTB1 2.493 2.375 .796 1.0 5.0 Professional ID2 4.581 4.600 1.079 1.0 7.0 Gender .282 .000 .451 .0 1.0 Age 32.823 29.000 8.251 24.0 56.0 Tenure 7.724 5.000 6.671 .50 31.0
Big Four Firm .829 .000 .377 .0 1.0
Children .324 .00 .469 .0 1.0 Contract 1.870 2.000 .337 1.0 2.0 Seniority 3.900 4.000 1.198 2.0 6.0 N=170 Table 3 Correlation Analysis Variable 1 2 3 4 5 1 Work-life conflict 1 2. Job satisfaction -.331** 1 3. AQTB .026 -.230** 1 4. Professional ID -.069 .255** .041 1 5. Gender .125 -.035 -.099** -.200** 1 6. Age -.182* .377** -.056 .037 -.150 7. Tenure -.114 .344** -.151 .093 -.173*
8. Big Four Firm .244** -.071 -.137 .155* .146
9. Children -.138 .378** -.158* .033 -.071
10. Contract .047 -.050 -.042 .049 -.109
11. Seniority -.208** .444** -.163* .188* -.169*
** P<.01, *p<0.05 Based on two-tailed tests
1 The abbreviation AQTB represents Audit Quality Threatening Behaviour 2 The abbreviation Professional ID represents Auditors’ Professional Identification
Table 3 (continued) Correlation Analysis Variable 6 7 8 9 10 1 Work-life conflict 2. Job satisfaction 3. AQTB 4. Professional ID 5. Gender 6. Age 1 7. Tenure .729** 1
8. Big Four Firm -.414** -.075 1
9. Children .786** .598** -.321** 1
10. Contract -.094 .061 .151* -.333** 1
11. Seniority .798** .711** -.222** .695** -.077
** P<.01, *p<0.05 Based on two-tailed tests
Hypotheses testing
In order to test the hypotheses, multiple regression analyses were executed. The results for the regression analyses of auditors’ job satisfaction and AQTB are presented in table 4 and 5 respectively. Each analysis consists of different models. Model 1 of table 4 and 5 contain only the control variables. In model 2 of table 4 and 5, both the control variables and the independent variables are included and model 3 of table 4 and 5 contain all control variables, independent variables and the interaction term of the moderator. These analyses will be explained below.
Control variables
Model 1 of tables 4 and 5 present the results of the baseline model where only the effects of the control variables are included. The results show that only the control variable seniority had a significant positive effect on auditors’ job satisfaction in model 1 of table 4 (b = .256, p = < 0.01). This provides evidence that auditors with a high seniority experience higher levels of job satisfaction than auditors with a lower seniority. In addition, only age had a significant positive effect on AQTB in model 2 of table 5 (b = .033, p < 0.05). This provides some tentative evidence that when auditors get older, they are less likely to engage in AQTB. Based on the correlation analysis, I identified no single relationship of the contract dummy (part-time or full-time) with each of the different variables.
Direct effect of work-life conflict
To test hypothesis 1, a regression analysis was run, which also included all control variables and professional identification. The results of this analyse are presented in model 2 from table 5. Hypothesis 1 suggests that auditors’ work-life conflict is positively related to AQTB. We find that there is no significance relationship between auditors’ work-life conflict and AQTB (b = -.007, p = .911). Thus, hypothesis 1 is not supported.
To test hypothesis 2, I also ran a regression analysis which again also included all control variables and professional identification. The results of this analysis are presented in model 2 from table 4. Hypothesis 2 predicts that auditors’ work-life conflict is negatively related to auditors’ job satisfaction. Results indicate that auditors’ work-life conflict has indeed a significant negative effect on auditors’ job satisfaction (b = -.241, p < .01). Thus, hypothesis 2 is supported.
Table 4
Regression analysis on job satisfaction
Model 1 Model 2 Model 3
Intercept 4.262** 4.377** 4.341** Control variables Gender .069 .176 .185 Age -.004 .002 .003 Tenure .005 .007 .007 Big four .080 .138 .136 Children .311 .335 .331 Seniority .256** .154 .155 Main effects Work-life conflict -.241** -.241** Professional ID .168** .188** Two-way interaction
Work-life conflict * professional identification -.060
R2 .209 .312 .316
Δ R2 .209** .102** .004
** P<.01, *p<0.05 Based on two-tailed tests N=170
Direct effect of job satisfaction
Hypothesis 3a furthermore stated that auditors’ job satisfaction is negatively related to AQTB. To test this hypothesis, different regression analyses are run on AQTB. Model 2 of table 5 regresses all control variables and all other independent variables on AQTB. I did find a significant relationship between auditors’ job satisfaction and AQTB (b = -.166, p < .05), although significant on the 5% level instead of 1%. Thus, hypothesis 3a is supported.
Table 5
Regression analysis on AQTB
Model 1 Model 2 Model 3
Intercept 2.513** 2.397** 2.485** Control variables Gender -.187 -.123 -.105 Age .032 .033* .029 Tenure -.015 -.012 -.009 Big four -.240 -.276 -.327 Children -.394 -.332 -.334 Seniority -.146 -.136 -.115 Main effects Work-life conflict -.007 -.0.10 Job satisfaction -.166* -.196** Professional ID .115 .086 Two-way interaction
Job satisfaction * professional identification -.082
R2 .095 .136 .152
Δ R2 .095* .041 .016
** P<.01, *p<0.05 Based on two-tailed tests N=170
Mediating role of job satisfaction
Hypothesis 3b suggests that auditors’ job satisfaction mediates the relationship between auditors’ work-life conflict and AQTB. To test this mediation effect, a regression was run in SPSS with the PROCESS tool with 5.000 bootstraps (Hayes, 2018). In this regression analysis I used auditors’ work-life conflict as the predicting value, auditors’ job satisfaction as the mediating variable and AQTB as the outcome variable. The results of table 6 show that the bootstrapped 95% confidence interval excludes zero [0.02, 0.09]. This implies that despite the absence of a direct significant relationship between work-life conflict and AQTB, there is an
indirect effect of work-life conflict on AQTB through job satisfaction. Therefore, hypothesis 3b is supported.
Moderating effect of professional identification
Hypothesis 4 predicts that professional identification moderates the relationship between work-life conflict and auditors’ job satisfaction. In order to test this hypothesis, an interaction term of work-life conflict and professional identification was created and included in model 3 of table 4. However, no evidence was found in support of this hypothesis (b = -.060, p = 0.345). Thus, professional identification does not moderate the relationship between auditors’ work-life conflict and auditors’ job satisfaction. However, I did find a significant positive relationship between auditors’ professional identification and job satisfaction (b = .168, p < 0.01). Nevertheless, a negative relation is still found between work-life conflict and job satisfaction as identified in hypothesis 2 earlier in this paper.
Hypothesis 5 states that professional identification moderates the relationship between auditors’ job satisfaction and AQTB. To test this hypothesis, an interaction term of job satisfaction and professional identification was created and included in model 3 of table 5. However, there was also no evidence found to support this hypothesis (b = -.082, p = .088). Thus, professional identification does also not moderate the relationship between auditors’ job satisfaction and AQTB. Again, however, a negative relation is still found between job satisfaction and AQTB, as identified in hypothesis 3a earlier in this paper.
Full model
Hypothesis 6 predicts that professional identification moderates the effect of work-life conflict on AQTB, through job satisfaction. To test this moderated mediation relationship, I used model 58 of the PROCESS macro with 5.000 bootstraps (Hayes, 2018) in SPSS. In order to test this moderated mediation, I set work-life conflict as predicting value, job satisfaction as
Table 6
Indirect effect of work-life conflict on AQTB through job satisfaction
Boot indirect effect Bootstrap SE Bootstrap 95% confidence interval
Lower bound Upper bound
Job satisfaction .0506 .0188 .0188 .0931
N=170
mediating variable, professional identification as the moderating variable and AQTB as the outcome variable. Results show that in the full model work-life conflict is significantly related to job satisfaction (b = -.241, p < .01), and job satisfaction is significantly related to AQTB (b = -.196, p < .01). However, the interaction term of work-life conflict and professional identification is not significantly related to job satisfaction (b = -.060, p = 0.345) and the interaction term of job satisfaction and professional identification is also not significantly related to AQTB (b = -.082, p = .088). Table 7 shows the conditional indirect moderated effect of work-life conflict on AQTB through job satisfaction. The effect is shown at the mean (M) level of professional identification and one standard deviation (SD) above and below the mean. The bootstrapped 95% confidence interval includes zero for a low level of professional identification [-.00, .09], but excludes zero for the mean [.03, .10] and a high level [.04, .16] of professional identification. Therefore, hypothesis 6 is not supported.
Table 7
Conditional indirect moderated effect of work-life conflict on AQTB through job satisfaction
Conditional indirect effect at Professional Identification = Mean +/- 1 SD
Level of
professional ID
Boot indirect Bootstrap SE Bootstrap 95% confidence interval
Lower bound Upper bound
3.5022 (M-1SD) .0331 .0241 -.0008 .0920
4.5812 (M) .0603 .0193 .0277 .1030
5.6601 (M+1SD) .0936 .0292 .0418 .1558
N=170
V. DISCUSSION AND CONCLUSION
Besides managing high work demands due to a heavy workload (Yustina & Valerian, 2018), auditors also have to balance their work with their personal and family life. When these different roles are incompatible, work-life conflict arises (Greenhaus & Beutell, 1985). Prior research among auditors found that work-life balance is associated with audit quality and improving work-life balance may improve audit quality (Khavis & Krishnan, 2017). Therefore, the purpose of this study was to examine under which circumstances auditors’ work-life conflict increases or decreases audit quality, where audit quality was measured by the engagement in audit quality threatening behaviour. In order to find out why and when auditors’ work-life conflict has an impact on audit quality, several hypotheses have been formulated. Based on these hypotheses, regression analyses have been conducted in order to study the effect of work-life conflict on audit quality, with job satisfaction as mediator and auditors’ professional identification as a moderator of these relationships.
Firstly, the results have not demonstrated a significant effect of auditors’ work-life conflict on audit quality threatening behaviour. This finding conflicts with a prior study among auditors, that found that work-life balance has a positive influence on audit quality (Khavis & Krishnan, 2017). Nevertheless, my finding corresponds with the finding of Karakas & Sahin (2017) who also found no significant relationship between work-family conflict and job performance of hotel management employees in general. However, even though I did not find a direct effect, I did find a significant mediation effect where auditors’ job satisfaction mediates the relationship between auditors’ work-life conflict and audit quality threatening behaviour. This mediating effect is in line with previous research. For example, Yustina & Valeria (2018) found that job satisfaction fully mediated the relationship between work-family conflict and auditors’ job performance. With these outcomes, this research does respond to the call of Knechel et al. (2013) to extend research on the attributes of audit quality by underlining the importance of work-life conflict to the quality of an audit. My research shows no evidence for a direct relationship between these two concepts, but other researchers can build upon the mediating effect that I found and focus more on the relationship between job satisfaction and audit quality threatening behaviour.
Secondly, I did find a significant negative effect of auditors’ work-life conflict on auditors’ job satisfaction. As far as I know, this concept is not investigated among auditors specifically yet, but this finding is in line with prior studies investigating the relationship between work-life balance and job satisfaction in general. For example, Mas-Machuca et al. (2016) investigated
this relationship within the pharmaceutical industry in Spain and Kanwar et al. (2009) investigated this within the IT and ITES industry in India. Different from this study, these two papers both investigated the relationship between work-life balance and job satisfaction, which is the counterpart of work-life conflict. Thus, the significant positive relationships they both found are in line with the negative relationship between work-life conflict and job satisfaction that this study demonstrated. Moreover, Haar, Russo, Suñe & Ollier-Malaterre (2014) investigated this relationship across different cultures and found the same relationship. Since previous studies have found corresponding results regarding this relationship, this study contributes to existing literature by showing that for Dutch auditors, work-life conflict also reduces job satisfaction.
In addition, the results of this paper show that auditors’ job satisfaction directly influences audit quality threatening behaviour. The conclusion that job satisfaction affects audit quality is also in line with previous research conducted. For example, Dewi, Maulana & Muhadzib (2017) also found that job satisfaction has a positive influence on audit quality. The outcomes of this research underline recent call in auditing research to pay more attention to the individual auditor when it comes to determining audit quality (Christensen et al., 2016). Of course, besides these work-life conflict and job satisfaction, other individual factors such as workload and stress may have a high impact on audit quality. Other researchers can build upon this and further investigate possible factors that can undermine audit quality.
Thirdly, I found no evidence of a moderating effect of professional identification on both hypothesized relationships. Thus, based on this research, I cannot conclude that professional identification weakens the negative relationship between auditors’ work-life conflict. Similarly, it is not possible to conclude that professional identification weakens the negative relationship between auditors’ job satisfaction and audit quality threatening behaviour. An explanation for this outcome may be that professional identification can function as a buffer against certain kinds of stressors, but not all types. Apparently, auditors’ professional identification does not reduce the negative relationship between work-life conflict and job satisfaction. Hence, auditors’ professional identification does not appear to have an impact on the negative relationship between auditors’ job satisfaction and audit quality threatening behaviour.
I also found no direct relationship between professional identification and audit quality threatening behaviour. Previous research found conflicting outcomes regarding this relationship. For example, Herda & Martin (2016) found a significant negative relationship between professional identification and dysfunctional audit behaviour. In contrast, the research of Paino, Smith & Iskandar (2012) does not support this relationship. Thus, the relationship I
found in my research is in line with the research of Paino et al. (2012). Nevertheless, I did find a direct positive relationship between auditor’s professional identification and job satisfaction. Thus, professional identification might still be an important factor in audit quality.
The finding that professional identification directly influences job satisfaction is in line with previous research in different work fields. For example, Zhang, Meng, Yang & Liu (2018) and Celik & Hisar (2012) both found a positive relationship between professional identification and job satisfaction within the health industry in China. Celik & Hisar (2012) explain this outcome by arguing that the augmentation of professional behaviour also increases knowledge power and implement success, which leads to an increase in employees’ job satisfaction. Therefore, it is possible to assume that working in harmony with auditors’ professional values brings positive changes in the working environment and thus increase auditors’ job satisfaction. Loi et al. (2004) found the same relationship for lawyers in China but have a different explanation for this outcome. They argue that professional identification fosters the congruence between an individual’s personal work values and professional values, since the individual’s beliefs about the profession have become self-referential or self-defining. Such congruence would result in positive job-related outcomes such as job satisfaction (Loi et al., 2004). Thus, auditors’ profession identification might, perhaps indirectly through a different factor, still be an important factor in determining audit quality. Other researchers can build upon this outcome and further investigate this relationship, for example by investigating job satisfaction as a mediator in the relationship between professional identification and audit quality. Since previous research shows conflicting results regarding the direct relationship between professional identification and audit quality threatening behaviour, further research should be conducted to obtain more clarity about the relationship between professional identification and the engagement of auditors in audit quality threatening behaviour.
Practical implications
This study can give information to accounting firms regarding factors which can increase audit quality threatening behaviour of employees. According to the Monitoring Commissie Accountancy (MCA), criticism of accountants has only continued and can be seen as a structural problem (MCA, 2020). Since auditing firms aim to deliver high quality audits, they will try to prevent audit quality threatening behaviour as much as possible. Therefore, in addition to theoretical implications this study also has some practical implications.
The results of this study show that auditors who experience high work-life conflict are in general less satisfied with their job. Also, auditors who are less satisfied with their job are more
likely to engage in audit quality threatening behaviour. Moreover, despite the absence of a direct relationship between work-life conflict and audit quality threatening behaviour, there appears to be an indirect influence of auditors’ work-life conflict on audit quality threatening behaviour through job satisfaction. Thus, based on this research, I can conclude that to decrease audit quality threatening behaviour and thereby increasing audit quality, auditing firms should monitor to what degree employees experience job dissatisfaction and seek ways to reduce this as much as possible. Simultaneously, it might be useful to monitor to what extent auditors experience work-life conflict and try to reduce these conflicts, for example by reducing workload or by offering training programs to support employees in maintaining a good balance between their work life and private life. This conclusion is in line with the recommendations of the Commissie Toekomst Accountancysector (CTA). In their report, endorsed by the MCA, they call for an attractive environment for accountants by reducing the workload and maintaining a good work-life balance for accountants (CTA, 2020).
Furthermore, the results indicate that auditors’ professional identification does not moderate both the relationship between work-life conflict and job satisfaction as the relationship between job satisfaction and audit quality threatening behaviour. Therefore, professional identification might have a less important role in performing a high-quality audit in comparison to other factors and increasing an auditors’ professional identification will not be an accurate strategy in preventing job dissatisfaction or audit quality threatening behaviour due to the occurrence of work-life conflict of auditors. However, results do show a positive relationship between auditors’ professional identification influences auditors’ job satisfaction. Therefore, it would still be useful for auditing firms to find ways to increase their employees’ professional identification and thereby increasing their perceived job satisfaction.
Limitations and future research
This study has several limitations. Firstly, since this research is conducted by survey, there is always a possibility of bias. The research is based on subjective outcomes and respondents could be biased by providing socially desirable responses, questioning the validity of the results. In order to address this issue, the survey is carefully designed, and participants are ensured that they would remain anonymous.
Thereby, since convenience sampling was used to approach auditors, there is a possible undercoverage bias which occurs when some members of the population are inadequately represented in the sample. The population consists of 71.8% males. As noted in the results section, this percentage is representative for the audit profession (Accountant, 2018).
