How do auditors thrive in turbulent times: The effects of
time pressure and job autonomy on thriving and auditors’
intention to leave
Master Thesis, MSc A&C Accountancy
University of Groningen, Faculty of Economics and Business
Ivar Willemstein
s2373645
Supervisor:
D.B. Veltrop, Ph.D
Co-assessor:
S Girdhar, Ph.D
June 2018
Word count: 9.177
ABSTRACT
In recent years, as a result of numerous scandals, auditors are facing public and political
pressure to increase the quality of their work, which resulted in stricter quality requirements
and regulation imposed by legislators and regulators, thereby reducing auditors’ autonomy to
carry out their work as they see fit. This thesis examines the relationships between auditor time
pressure – a central variable for how auditors carry out their work – and auditors’ intention to
leave through the concept of thriving. By conducting a moderated-mediation multiple
regression analysis of survey data on 140 Dutch auditors, this research found that thriving
mediates the relationship between time pressure and intention to leave, as was hypothesized.
However, the results show that thriving only mediates this relationship when auditors’ job
autonomy is low. When job autonomy is high, time pressure does not affect auditor thriving
anymore, providing evidence on the converse and detrimental effects of stricter regulation,
because such regulation generally reduces individual auditors’ autonomy. The conclusions
increase our understanding of the effects of time pressure among auditors and expand our
knowledge why some auditors thrive while other struggle in dealing with time pressure.
TABLE OF CONTENT
1. INTRODUCTION
4
2. LITERATURE REVIEW
6
Intention to Leave
6
Thriving
7
Self-Determination Theory
8
Time Pressure
8
The relationship between Thriving and Auditor Intention to Leave
10
Job Autonomy
11
The moderating role of Auditor Job Autonomy
12
3. METHODOLOGY
14
Research design
14
Variable measurement
14
Analysis
16
4. RESULTS
16
5. DISCUSSION
20
Limitations and directions for further research
22
Practical implications
24
REFERENCES
25
1. INTRODUCTION
External investors and other stakeholders demand independent and reliable examination and assurance of financial information published by a company, as to protect their rights and invested resources (Newman, Patterson, & Smith, 2005). For this purpose, auditing has been acknowledged for its ability to provide credibility to financial accounting information, and auditors are valued as playing a crucial role within society as financial custodians of the community (DeFond & Zhang, 2014; Limperg, 1985). However, the audit sector is currently facing lots of criticism from society. Politicians, corporate executives and market authorities are increasingly annoyed by the perceived lack of improvement of audit quality (FD, 2017a; NBA, 2014). In recent years, media across the globe extensively covered accounting scandals where auditors were negatively involved in. Also in the Netherlands with scandals like Imtech (fraudulent reporting) and Balast Nedam (bribery). Furthermore, the Dutch financial supervisory authority responsible for the supervision on the quality of audits - the AFM - regularly reports on flaws found in audit files. The latest AFM report showed that 59% of the verified audits performed by the Big-4 accountancy firms are not fully compliant with law and regulation (AFM, 2017). As a result of the perceived lack of audit quality, many new rules and laws were implemented addressing auditor independence, oversight from the AFM and training and education of auditors (NBA, 2014). Furthermore, the professional body for auditors - the NBA - implemented 53 measures focused on the improvement of auditor culture and behavior, as a means to improve auditor quality (NBA, 2014). This is in line with auditors’, investors’ and academics’ beliefs that individual auditor characteristics and behaviors are important determinants of audit quality (Christensen, Glover, Omer, & Shelley, 2016; Francis, 2011; Robert Knechel, Krishnan, Pevzner, Shefchik, & Velury, 2013). As a consequence of stricter regulation, the perceived time pressure experienced by auditors appears to have increased in recent years, i.a. due to: the recently implemented mandatory auditor switch (NRC, 2016), increased audit quality requirements (Blankley, Hurtt, & MacGregor, 2014; FD 2017b), and the decreased timespan to deliver the audit statement (Lambert, Jones, Brazel, & Showalter, 2017).
One persistent impediment to high audit quality is auditor turnover, which has been affecting audit firms for decades. The up-or-out system, an expectations gap and a tough work-life balance are some of the reasons auditors leave their firm rather quickly (Carcello, Copeland Jr., Hermandson, & Turner, 1991; Gertsson, Sylvander, Broberg, & Friberg, 2017; Herda & Lavelle, 2012). High levels of auditor turnover have been concerning researchers and practitioners, as it increases personnel costs and has a negative association with audit teams’ expertise, threatening audit quality (Donnelly, Quirin, & O’Bryan, 2003; Gertsson et al., 2017; Hiltebeitel & Leauby, 2001). However, recently audit firms are increasingly struggling to retain sufficient qualified auditors to maintain the desired turnover rate, which thwarts audit firms commitment to improve the quality of their audits (Telegraaf, 2018; Herda & Lavelle, 2012; NRC, 2016).
Although, as mentioned before, time pressure seems to have increased recently, academic researchers have recognized that time pressure is ubiquitous in the audit profession across the globe (Coram, Ng, & Woodliff, 2003; Glover, 1997; Low & Tan, 2011). This is supported by multiple professional reports in the Dutch setting, all stressing the alarming levels of time pressure experienced by auditors (Centraal Bureau voor de Statistiek, 2017; NBA & SRA, 2017). Time pressure has been subject to many articles in the auditing literature, the vast majority of which suggesting negative implications on audit quality (Blankley et al., 2014). Moreover, in practice it is found that a high auditor workload results in auditors leaving the firm (Accountant.nl, 2017; NRC, 2016). High levels of time pressure and workload are considered to be strong antecedents for burnouts and mental exhaustion, which often leads to resignation (Fogarty & Kalbers, 2000; Herda & Lavelle, 2012).
A new way to explore the relationship between time pressure and auditors’ intention to leave, is through the concept of thriving. A recent literature study explored the extant knowledge on thriving across different domains and populations and found that, while thriving has received considerable attention in settings such as schools, hospitals, military and sports, the concept of thriving in businesses has received limited attention (Brown, Arnold, Fletcher, & Standage, 2017; Paterson, Luthans, & Jeung, 2014). Scientific articles on thriving within the audit domain are nonexistent. Within the business context, thriving is often defined as “the psychological state in which individuals experience both a sense of vitality and a sense of learning” (Spreitzer, Sutcliffe, Dutton, Sonenshein, & Grant, 2005: p.538). Thriving could also be explained in terms of growing or developing well and being prosperous and successful (Brown et al., 2017). The concept of thriving could be of particular importance for the audit sector as audit firms and oversight bodies are looking for the right responses to the increased pressure to improve audit performance, while endorsing the relevance of individual auditor characteristics in this process (Christensen et al., 2016). As increased job demands are expected to increase auditor turnover, it is relevant to examine if enabling auditors to thrive at work is a way of mediating this relationship. This could be profitable for practitioners at audit firms as it aims to provide insights into the motives of auditors to stay with their firm.
Since high levels of workload seem inevitable in the audit profession, it is relevant to examine how to influence the relationship between time pressure and thriving. As already discussed, new laws and regulation on e.g. quality requirements, independence and training have been implemented, resulting in stricter guidelines to perform audit tasks. While their aim is to improve auditor performance, stricter rules and standards deteriorate the degree to which individual auditors have the freedom in deciding how to perform their work tasks. A lower degree of job autonomy is associated with a decrease in work enjoyment, consequently leading to a decrease in thriving (Ryan & Deci, 2017). At the same time, job autonomy has many beneficial outcomes at work (e.g. Ahearne, Mathieu, & Rapp, 2005; Bakker, van Veldhoven, & Xanthopoulou, 2010; Piccolo & Colquitt, 2006). This research also explores whether, given the high levels of time pressure, increasing job autonomy is an instrument to improve auditor
thriving. It could provide regulators and practitioners insights on whether more and stricter regulation is beneficial for auditor thriving, contrary to allowing auditors to use their professional judgement. In order to gain a proper understanding of the interrelationships between the aforementioned variables, the following research question has been developed:
RQ: How does time pressure and job autonomy impact thriving of auditors and their intention to leave the firm?
Through a survey among Dutch auditors, this research aims to contribute to our understanding of the relatively undeveloped concept of thriving in business settings by examining its impact on the relationship between time pressure and intention to leave, while exploring the role of job autonomy in this model. The remainder of this paper is structured as follows: in the next section a review on the key concepts and theories from literature is provided, which will lead to the forming of the hypotheses. Section three describes the methodology used in this research, elaborating on the data collection and data analysis. In section four the results will be presented and interpreted. The paper ends with a discussion on the results and directions for future research.
2. LITERATURE REVIEW
Intention to Leave
For decades, the audit sector has been characterized by high employee turnover rates (Fogarty & Uliss, 2000; Herda & Lavelle, 2012). Research has found that 85 percent of initial hires leave the firm within a ten years period (Rhode, Sorensen, & Lawler, 1976), whereas more than 30 percent leaves the firm within three years (Hiltebeitel & Leauby, 2001). To a large extent, natural turnover is a necessity in audit firms, as sufficient auditors have to leave the firm in order to maintain the hierarchical pyramid structure with only a few partners in the upper layer and many junior auditors in the bottom layer. However, if too many auditors leave the firm this could lead to reduced expertise and quality of audit teams (Gertsson et al., 2017). Furthermore, anecdotal evidence from Hiltebeitel and Leauby (2001) suggests that the recruitment, hiring and replacing costs of an employee are 150% of an employee’s annual salary. Therefore, high turnover rates could be costly to audit firms. Also, turnover intention leads to a higher level of acceptance of dysfunctional behavior, also threatening audit quality (Donnelly et al., 2003). This negative relationship between turnover rate and audit quality has also been concerning regulatory bodies: the British Financial Reporting Council (FRC) for example suggests that audit firms’ failure to retain sufficient experienced staff could eventually undermine audit quality (Financial Reporting Council, 2006).
There are several reasons why auditors choose to leave the firm or the profession. In the recent years of economic revival, work pressure among auditors has increased, while the remuneration has not increased in the same pace, resulting in higher turnover intentions (Telegraaf, 2018; Herda & Lavelle, 2012; NBA & SRA, 2017; NRC, 2016). Auditors are faced with demanding deadlines and a disadvantageous work-life balance, while young auditors are also required to pass the CPA examination at the same time (Herda & Lavelle, 2012). This work pressure could lead to emotional exhaustion and burnouts, which have positive relationships with turnover intention (Fogarty & Kalbers, 2000; Herda & Lavelle, 2012). While turnover intention is an emotional state and not a direct action, it is generally believed that one’s intention to leave provides a viable indication of actual turnover (Steel & Ovalle, 1984). Furthermore, research found a high expectations gap between accounting students’ beliefs of some attributes of the profession, and reality, especially on topics such as prestige and sense of meaning (Carcello et al., 1991). Also, Viator (2001) showed that role ambiguity and role conflict lead to higher levels of turnover intention for auditors, and Hall and Smith (2009) found that career development support and psychological empowerment increases auditors’ intention to leave, where psychological empowerment refers to individuals’ beliefs in their own meaning, competence and influence. All in all, research shows that turnover intention is an important topic in the audit sector and that this is very much driven by psychological factors.
As audit firms acknowledge the potential threats of losing too many qualified auditors, they are looking for ways to retain them (Telegraaf, 2018). However, before exploring how to retain qualified auditors, it is necessary to gain an understanding of why some auditors are likely to thrive, while others struggle in their work.
Thriving
Thriving is a relatively new concept in the positive psychology literature and is central to the human desire for personal fulfillment and self-determination (Brown et al., 2017). The concept of thriving within the business context was developed by Spreitzer et al. (2005). Their socially embedded model of thriving at work was developed as a response to the lacking knowledge on the positive effects of work contexts on individuals, as opposed to numerous papers on the negative consequences of particular work contexts. In their model, thriving is defined as “the psychological state in which individuals experience both a sense of vitality and a sense of learning at work” (Spreitzer et al., 2005: p. 538). The vitality component addresses the affective dimension of psychological development and is referred to as experiencing positive feelings based on available energy and feelings of aliveness (Porath, Spreitzer, Gibson, & Garnett, 2012). The focus on vitality is grounded in the hedonic perspective in psychology, which argues that individuals tend to seek out favorable and pleasurable experiences (Ryan & Deci, 2001; Spreitzer et al., 2005). The learning component, which is derived from the eudaimonic perspective, addresses the cognitive dimension of the psychological experience of development and is explained as one’s sense of continual improvement and getting better at what one does (Porath et al.,
2012; Spreitzer et al., 2005). The eudaimonic perspective focusses on individuals striving for self-realization and meaning (Ryan & Deci, 2001). Spreitzer et al. (2005) argue that only the joint experience of learning and vitality at work enables individuals to thrive. A thriving workforce is important for organizations since it contributes in generating knowledge, creating positive meaning and building strong relationships; enabling organizations to grow, to develop and to become sustainable (Spreitzer, Porath, & Gibson, 2012; Spreitzer et al., 2005).
Self-Determination Theory
Academics’ efforts to find personal and contextual enablers and contributing agentic behaviors of thriving in the working environment is grounded in the self-determination theory (SDT) (Paterson et al., 2014; Spreitzer et al., 2005). SDT is a macro-theory which purpose is to explain the determinants and outcomes of human agentic behavior, and is derived from the vast base of research and theories on the differential impacts of intrinsic and extrinsic motivation (Deci & Ryan, 1980). Building upon existing knowledge on intrinsic motivation, Deci and Ryan (2000) – who formalized SDT – proposed that individuals desire optimal human development through growth-striving behavior and certain social environmental conditions. Pivotal for self-determined motivation is the satisfaction of three basic psychological needs, namely the need for competence, autonomy and relatedness (Deci & Ryan, 2000). A work environment that provides support for these three needs leads to agentic work behavior and is considered to be optimal for psychological growth and development (Deci & Ryan, 2000; Spreitzer et al., 2005).
In relation to these three basic needs from SDT, a study with college students showed that all three psychological needs are positively associated with the vitality component of thriving (Reis, Sheldon, Gable, Roscoe, & Ryan, 2000). Also the learning component of thriving is positively influenced by feelings of competence (Vinarski-Peretz, Binyamin, & Carmeli, 2011), relatedness (Fredrickson, 2001) and autonomy (Spreitzer, 1996). Subsequently, the central question for understanding how to retain qualified auditors may very well lie in understanding the determinants of auditor thriving in their audit work.
Time Pressure
When it comes to audit work, a very salient factor for auditors is time pressure (Coram et al., 2003). Work overload and time pressure in the audit profession has been concerning audit firms, professional bodies and researchers for decades. In the Dutch context for instance, several reports on this matter have recently been published. According to a report from Statistics Netherlands, the audit profession is among the professions with the highest workload experience in the Netherlands (Centraal Bureau voor de Statistiek, 2017). This is in line with survey evidence from a survey among auditors executed by the NBA and the SRA (2017) (network association of small and medium-sized accountancy firms), suggesting that auditors face excessive time pressure (NBA & SRA, 2017). Also academics have found
these outcomes in multiple countries and in different time periods and they generally agree upon the persistent presence of time pressure in the audit industry (Coram et al., 2003; Low & Tan, 2011; Willett & Page, 1996). In line with Prem et al. (2016: p. 110), time pressure is defined as “the extent to which employees feel that they need to work at a pace faster than usual or have insufficient time to finish their work tasks”.
Both audit firms’ budgets as well as clients’ reporting and regulatory deadlines require auditors to perform the audit tasks within a certain timeframe, which inevitably creates tension as auditors are also required to collect sufficient evidence to meet professional standards and regulation. This tension is even more apparent in ‘busy season’, the yearly peak period as a result of the clustering of companies with the same fiscal year-end date (López & Peters, 2011, 2012). In recent years, due to several developments in the sector, time pressure among auditors has become a relevant topic once again. For instance, perceived time pressure among auditors has increased recently due to stricter filling deadlines (Lambert et al., 2017), the mandatory auditor switch (NRC, 2016), audit firms operating near capacity and the shrunk supply of new, young talent (FD, 2017b), and the increased complexity of new regulation as well as the increased pace in which regulation develops (Blankley et al., 2014).
As time pressure is an ubiquitous phenomenon for auditors, researchers have studied its consequences on audit quality factors extensively (Lambert et al., 2017). While some studies found that when auditors are experiencing time pressure, they become more effective in concentrating on just the relevant evidence and ignoring the non-diagnostic, irrelevant information (Glover, 1997), most evidence shows negative consequences of time pressure: it increases reduced audit quality practices (Coram et al., 2003), it lowers earnings quality (Lambert et al., 2017) and it threatens professional skepticism (Braun, 2000). Furthermore, time pressure thwarts the effectiveness of audit techniques and it reduces effective reviewing of audit workpapers (Agoglia, Brazel, Hatfield, & Jackson, 2010).
Research on the relationship between time pressure and thriving is indecisive regarding the direction of the relationship. On the one hand, when working under time pressure, employees have to invest additional effort to meet performance requirements, which causes stress and psychological strain (Ordoñez & Benson III, 1997; Rivkin, Diestel, & Schmidt, 2015; Widmer, Semmer, Kälin, Jacobshagen, & Meier, 2012). Consequently, one would assume a negative relationship between time pressure and the vitality component of thriving. On the other hand, time pressure increases employees’ motivation to learn as they want to avoid such experiences in the future (LePine, LePine, & Jackson, 2004) and, when having coped successfully with time pressure, employees will experience a sense of personal accomplishment (LePine, Podsakoff, & LePine, 2005). Therefore, in relation to the learning component of thriving, a positive impact of time pressure is assumed (Prem, Ohly, Kubicek, & Korunka, 2017). Prem et al. (2017) considered the two elements of thriving separately in their analysis of the impact of work pressure on thriving, and hypothesized the directions of the separate relationships as mentioned
above. However, in line with the original model of thriving at work as developed by Spreitzer et al. (2005), this research considers learning and vitality jointly in the analysis. For the audit sector specifically, the expectation is that time pressure generally is considered as having a negative impact on thriving, for two reasons. Firstly, as generally agreed upon in academic research and professional practice reports, auditors face excessive levels of time pressure. In the audit sector it is often found that (a high level of) time pressure has detrimental effects on performance (Pietsch & Messier, 2017). At the same time, Paterson et al. (2014) found that thriving individuals are performing better than their non-thriving peers. Secondly, research among auditors found time pressure to be an important determinant for burnouts and job dissatisfaction (Gertsson et al., 2017; Sweeney & Summers, 2002), which are opposite outcomes as compared to thriving (Paterson et al., 2014; Porath et al., 2012). This leads to the following hypothesis:
H1: Auditor time pressure negatively influences auditor thriving.
The relationship between Thriving and Auditor Intention to Leave
Thriving at work has many beneficial outcomes for individuals. Firstly, as Spreitzer et al. (2005) reasoned, thriving serves as an internal gauge to sense progress in individual development, whether they are improving in terms of learning and vitality. This way, individuals could take corrective actions when necessary, which fosters their self-development (Paterson et al., 2014). Anecdotal evidence suggests that using thriving as an internal gauge improves efficient work scheduling and burnout prevention (Spreitzer & Porath, 2014). This is supported by survey evidence, showing that thriving is associated with better health and well-being, less strain and fewer burn-outs (Porath et al., 2012). Furthermore, Porath et al. (2012) show that thriving is associated with more career development and thriving outside of the work context. Lastly, thriving is associated with better job performance: employees with higher levels of thriving supposedly have performance scores, as rated by their superiors, that are 15% higher than their non-thriving colleagues (Paterson et al., 2014; Porath et al., 2012).
While both vitality and learning are important topics within the audit literature, the concept of thriving has not yet been applied to the audit industry specifically. Practitioners, investors and researchers agree that individual auditor characteristics and behaviors are important determinants of audit quality and thus requires academics’ attention (Christensen et al., 2016; Francis, 2011; Robert Knechel et al., 2013), which stresses the relevance of the concept of thriving. In relation to the vitality of auditors, much research has been conducted on auditor burnout determinants and consequences. Auditing has always been a highly stressful profession (Herda & Lavelle, 2012; Low & Tan, 2011), and stress and work overload are associated with higher levels of burnout and mental exhaustion (Crawford, LePine, & Rich, 2010). Work overload and burnout lead to higher turnover intention among auditors (Herda & Lavelle, 2012) and lower audit quality (Blankley et al., 2014; Glover, Hansen, & Seidel, 2017; Lambert et al., 2017). In relation to the learning component, most knowledge and skills necessary for auditors to
perform well is developed on the job, stressing the importance of the cognitive function of on-the-job learning for auditors (Bédard, 1989). Not only technical skills are relevant in this regard, also acquiring appropriate values, norms and behaviors in order to create a professional attitude is done on the job (Kornberger, Justesen, & Mouritsen, 2011). Consistent with thriving literature, audit firms benefit from on-the-job learning, as it creates knowledge, positive meaning and enables broad information sharing (Kornberger et al., 2011).
When incorporating the socially embedded model of thriving at work to auditors’ intention to leave, it is found that vitality leads to a lower level of turnover intention (Jones, Norman, & Wier, 2010). Relating to the learning component of thriving, Carcello et al. (1991) show that audit assistants like challenging and varied tasks most about their work, and Gammie and Whiting (2013) find in their research among female auditors that the main reasons to leave the audit profession is their search for interesting work and better working conditions. Therefore, the second hypothesis is as follows:
H2: Auditor thriving is negatively related to auditor intention to leave.
As time pressure is expected to have a negative impact on both thriving and turnover intention, and thriving individuals seem to be more inclined to stay at the firm, it is expected that thriving at work could mediate the relationship between time pressure and auditors’ intention to leave. This results in the following hypothesis:
H3: Auditor thriving mediates the positive relationship between auditor time pressure and auditor intention to leave.
Job Autonomy
Job autonomy is a relevant variable within the context of this research, as it is recognized in the socially embedded model of thriving as one of the contextual enablers of agentic work behaviors, and thus considered as an antecedent of thriving at work (Spreitzer et al., 2005). According to the model, thriving is caused by agentic work behaviors, which in turn are influenced by contextual features and resources (Spreitzer et al., 2005). Individuals working agentically are said to be intentionally active and purposeful at work and in control of their own behavior (Bandura, 2001). Spreitzer et al. (2005) argue that agentic work behaviors are the ‘engine’ of thriving and function more or less as mediators between both contextual features and resources, and thriving. Furthermore, autonomy is one of the fundamental psychological needs which, according to SDT, should be satisfied for employees in order to optimally grow and develop, and thus, to act agentically (Deci & Ryan, 2000). Since job autonomy is such a fundamental element in theory on organizational behavior and psychology, it seems a prerequisite for beneficial work outcomes such as development, well-being and performance. This seems in line with organizations’ beliefs, as they are increasingly implementing policies of job autonomy to improve performance, motivation and satisfaction (Lu, Brockner, Vardi, & Weitz, 2017).
Researchers have found many beneficial outcomes of job autonomy on performance measures. Piccolo & Colquitt (2006) found job autonomy to be one of the determinants of task performance and organizational citizenship behavior. Furthermore, if leaders empower their personnel with more decision latitude, this eventually leads to better team performance (Ahearne et al., 2005) and to more creativity among employees (Liu, Chen, & Yao, 2011). Increasing autonomy also leads to more task enjoyment and organizational commitment (Bakker et al., 2010), and to higher levels of job- and life satisfaction (Liu, Spector, & Jex, 2005; Thompson & Prottas, 2005). Moreover, research has found that job autonomy is associated with higher levels of well-being (Baard, Deci, & Ryan, 2004), and lower levels of anxiety and doctor visits (Liu et al., 2005).
When it comes to audit work in particular, in recent years, due to fraud cases and audit errors which caused regulators, politicians and the general public to express their mistrust in the audit sector, stricter regulation and requirements have been imposed on auditors’ work, independence and training (Blankley et al., 2014; Glover et al., 2017; FD: 2017a, 2017b; Lambert et al., 2017; NBA, 2014; NRC 2016). In addition, auditors have to comply with many (international) auditing and reporting standards, independence and behavioral requirements or guidelines and legislation on reporting and auditing. While these requirements, guidelines and regulation are aimed to improve audit quality, it deteriorates the degree to which individual auditors are free in deciding how to perform their work tasks, i.e., it decreases their job autonomy. Job autonomy is defined as “the degree to which the job provides substantial freedom, independence, and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out” (Hackman & Oldham, 1976: p. 258).
The moderating role of Auditor Job Autonomy
Research has begun to recognize that work stressors –such as time pressure- could have both good and bad effects (Webster, Beehr, & Love, 2011). The challenge-hindrance model of occupational stress explicitly acknowledges this distinction (Cavanaugh, Boswell, Roehling, & Boudreau, 2000). According to this model, challenge stressors are defined as “work-related demands or circumstances that, although potentially stressful, have associated potential gains for individuals” (Cavanaugh et al., 2000: p. 68). Likewise, hindrance stressors are defined as “work-related demands or circumstances that tend to constrain or interfere with an individual’s work achievement and that do not tend to be associated with potential gains for the individual” (Cavanaugh et al., 2000: p.68). Generally, challenge stressors supposedly have positive influence on work outcomes as job satisfaction and performance, while hindrance stressors have negative influence on these outcomes (Crawford et al., 2010; LePine et al., 2005; Podsakoff, LePine, & LePine, 2007).
The challenge-hindrance model of occupational stress is implicitly based on the transactional theory of stress (Webster, Beehr, & Christiansen, 2010). The transactional theory of stress argues that it is an individual’s appraisal of a stressful situation that determines whether it is perceived as a challenge or a
hindrance (Lazarus & Folkman, 1984; Webster et al., 2011). Webster et al. (2011) introduced individual appraisal in the challenge-hindrance model and found that typical challenge stressors could be appraised primarily as hindrances and vice versa. Moreover, a certain stressor could simultaneously be appraised as both a challenge and a hindrance (Prem et al, 2017; Webster et al, 2011). Regarding time pressure, it is found that this is not more strongly appraised as a challenge than as a hindrance (Webster et al., 2011), and it has both negative and positive influence on well-being (Widmer et al., 2012).
In other words, it depends on the individual evaluation and the environment whether time pressure is experienced as either a challenge or a hindrance, which implies that this appraisal is dependent on other factors. One such factor is job autonomy. Thompson and Prottas (2005) find for example that employees with high levels of job autonomy experience lower levels of stress and turnover intention, and Fogarty and Kalbers (2000) find that perceived job autonomy directly decreases role stress among auditors. Hence, auditor job autonomy seems to impact the way in which auditors cope with stress. From these articles could be derived that auditors with more job autonomy seem more capable in dealing with time pressure, which results in less adverse outcomes such as turnover intention. Consequently, auditors with a higher level of job autonomy are expected to appraise time pressure more as a challenge as opposed to auditors with a lower level of job autonomy. In other words, auditors with a high level of perceived job autonomy are more inclined to view time pressure as a work-related demand that, although potentially stressful, have associated potential gains (cf. Cavanaugh et al., 2000). In conclusion, auditor job autonomy supposedly could impact the relationship between time pressure and thriving, as it alters the primary appraisal of time pressure towards a challenge perspective, and thus could reduce the negative relationship between time pressure and thriving. This leads to the following hypothesis:
H4: Job autonomy positively moderates the relationship between time pressure and thriving.
Assuming job autonomy moderates the association between time pressure and thriving, it is also likely that job autonomy will conditionally influence the strength of the indirect relationship between time pressure and intention to leave (through thriving), thereby demonstrating a pattern of moderated mediation, as depicted in figure 1.
H5: Job autonomy moderates the negative indirect effect (through thriving) of time pressure and auditor’s intention to leave.
Figure 1. Conceptual model
3. METHODOLOGY
Research design
The study was conducted among Dutch-speaking auditors situated in the Netherlands. For purpose of this and several other studies, a survey was carefully developed and sent to auditors. 178 auditors were personally approached by a team of researchers and asked whether they would like to participate in the study. After these auditors confirmed their participation, the survey was sent by means of an online tool. The response rate was 80%. Of the 142 respondents, 2 were removed from the data as they did not complete the survey. Therefore, their data were not useful for the analysis.
The respondents’ age ranged from 23 to 60, with an average of 31, and 68% (32%) of the respondents were male (female). See Table 1 for further descriptive statistics.
Variable measurement
Unless explained otherwise, all questions in the survey were measured on a 7-item Likert scale (see Appendix A for the complete overview of the questions). As all respondents were Dutch, the questions were translated from English to Dutch and was checked for accuracy of the translation. Furthermore, in order to avoid too lengthy surveys which could adversely impact the reliability of the answers provided, one validated set of questions derived from literature to measure a certain construct was shortened. More elaboration and justification will be provided per variable.
Intention to leave
In line with the recent publication of Cohen, Dalton and Harp (2017), the full three-item turnover intentions scale developed by Viator and Pasewark (2005) was used. On the Likert scale used here, 1 represented “strongly disagree” and 7 represented “strongly agree”. Cronbach’s alpha for the scale was 0.86, indicating acceptable reliability.
Thriving
Both dimensions of thriving – learning and vitality – are measured by means of the scale developed by Porath et al. (2012). In this study, for the survey not to become too lengthy, the reverse code items are excluded, as negatively worded questions are more inclined to impair psychometric properties of scales (cf. Prem et al., 2017). This resulted in four questions for each dimension on a scale of “strongly disagree” (1) to “strongly agree” (7). The Cronbach’s alpha equaled 0.871.
Time pressure
The construct of time pressure was measured by means of the four-item time pressure subscale from the Stress Diagnostic Survey (Matteson & Ivancevich, 1987). The Likert scale ranged from “the condition is never a source of stress” (1) to “the condition is always a source of stress” (7). Cronbach’s alpha equaled 0.89.
Job autonomy
Job autonomy was assessed using the three-item scale developed by Spreitzer (1995), which was a modification of the scale developed by Hackman and Oldham (1980). The Likert scale ranged from “strongly disagree” (1) to “strongly agree” (7). Cronbach’s alpha equaled 0.83, indicating acceptable reliability.
Control variables
In order to control for unintended influences from other factors not included in the research model, various other variables are included as control variables. The first one is gender, as it has been found that women tend to have lower levels of energy and vitality, which is subsequently related to thriving (Niessen, Sonnentag, & Sach, 2012; Purvanova & Muros, 2010), and are more inclined to leave the accounting profession (Gammie & Whiting, 2013). In line with Abid, Zahra and Ahmed (2016), the second control variable is age. Age is significantly related to turnover decisions of auditors (Dalton, Hill, & Ramsay, 1997; Law, 2010), and also impacts aspects of thriving (Porath et al., 2012). The third control variable is professional identification, which is defined as “professional employees’ sense of oneness with their profession” (Hekman, Bigley, Steensma, & Hereford, 2009: p. 510). Professional identification is related to turnover intention (Jiang, Wang, Chui, & Xu, 2017) and also leads to better performance of auditors (Jeffrey & Weatherholt, 1996). Professional identification was measured by the five questions from Russo (1998) using a Likert scale ranging from “strongly disagree” (1) to “strongly agree” (7). Cronbach’s alpha after eliminating PROF_03 (due to multiple factor loading) equaled 0.76.
Common source bias
As all data were obtained from survey-research, only one source and one point in time was used for this research. In order to be confident that no common method bias is present in the results and to check for internal consistency, the Harman’s single factor test was conducted. For this purpose, an unrotated single-factor analysis was performed (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003). The results
showed that this explained 26% of the variance, which is below the 50% limit, suggesting that common method bias is not a serious issue.
Additional analyses discriminant and convergent validity
The Kaiser-Meyer-Olkin (KMO) test was conducted to test the sample adequacy, which resulted in a KMO score of 0.805. The KMO test is a measure that shows what relative amount of the variance among the variables might be the result of common variance. This score is classified as ‘great’ and therefore falls within an acceptable range (Hutcheson & Sofroniou, 1999), which indicates that the data is suited to perform a factor analysis. Factor analysis was then conducted to test for discriminatory validity of the constructs. It showed that all constructs are identified as separate items without multiple loadings within a construct. Furthermore, the factor analysis has shown that there are no factor loadings that are less than 0.50 (see Appendix A), which is the minimum requirement as for the construct validity (Field, 2013). However, one item (PROF_03) was removed from the analysis, as it loaded into two different factors.
Analysis
As various independent variables are included in the research model to predict the value of the dependent variable, a multiple regression analysis was performed for testing the hypotheses.
4. RESULTS
Descriptive statistics and correlations for all included variables are displayed in Table 1. Several significant correlations exist, which could potentially lead to multicollinearity problems. Therefore a test with the variance inflation factor (VIF) was performed, as depicted in Table 2. As models with a VIF above 10 signal multicollinearity and the highest VIF equals 1.291, multicollinearity is not a problem (Sinan & Alkan, 2015).
Table 1. Descriptive and correlation statistics
Variable Mean SD 1 2 3 4 5 6 7 1. Intention to leave 3.32 1.50 - 2. Thriving 5.26 0.82 -.458** - 3. Time pressure 4.62 1.26 .343** -.154 - 4. Job autonomy 4.57 1.15 -.101 .088 -.125 - 5. Age 30.94 8.12 -.230** .039 -.185* .357** -
6. Gender dummy (1=female) 0.32 0.47 .052 .069 .403** -.149 -.212* -
7. Professional identification 4.26 1.10 -.157 .233** .075 .165 .069 -.057 -
Notes: * p < .05, ** p < .01 (two-tailed)
Table 2 shows the multiple regression results for the tests H1, H2, H3 and H4. Models 1-3 have thriving as dependent variable, whereas the dependent variable in models 4 and 5 is intention to leave. Model 1 only shows the relation between the control variables and thriving. In model 2, time pressure and job autonomy were added. Subsequently, the interaction term was added in model 3, depicting the moderation result. Model 4 shows the relationship between time pressure and intention to leave, which is necessary for testing the mediation hypothesis. Model 5 shows the relationship between time pressure and intention to leave while controlling for thriving, and the relationship between thriving and intention to leave while controlling for time pressure.
H1 predicted a negative relationship between time pressure and thriving. The results in model 2 show that there is a significant negative association (β = -.198, p < .01), supporting H1. H2, which proposed a negative relationship between thriving and intention to leave, is depicted in model 5. A significant negative relationship was found (β = -.695, p < .01) and therefore H2 is accepted.
Table 2. Regression results
Variable Thriving Intention to leave
Model 1 Model 2 Model 3 Model 4 Model 5
Intercept 5.097 5.167 5.135 3.671 7.039
(.285) (.293) (.287) (.816) (1.011)
Controls Variables
Age .004 .000 .001 -.032* -.032*
(.009) (.009) (.009) (.015) (.014)
Gender dummy (1=female) . 168 .336* .353* -.496 -.264
(.147) (.157) (.154) (.274) (.257) Professional identification .207** .222** .240** -.293* -.136 (.067) (.067) (.066) (.116) (.112) Independent variables Time pressure -.198** -.177* .457** .347** (.073) (.072) (.101) (.096) Job autonomy .032 .017 (.072) (.071)
Time pressure x Job autonomy .167*
(.065) Thriving -.695** (.139) R2 .072 .123 .164 .199 .324 Adjusted R2 .052 .090 .126 .175 .299 F-value 3.532* 3.750** 4.353** 8.389** 12.864** Highest VIF 1.053 1.236 1.242 1.233 1.291
Notes: variables are standardized
N=140 * p <.05 ** p <.01 (two-tailed)
In H3 is argued that thriving mediates the positive relationship between time pressure and auditor’s intention to leave. For determination of a mediation effect, the following conditions should hold (cf. Baron & Kenny, 1986):
2. Thriving significantly affects intention to leave (path b);
3. While controlling for paths a and b, the previously significant relationship between time pressure and intention to leave (path c) is significantly lessened.
The first condition equals H1 and was already accepted. The second condition – path b – is consistent with H2 and was also already accepted. For the first element of the third condition to hold, path c should first be significant without controlling for thriving. Model 4 shows a significant positive relationship between time pressure and intention to leave (β = .457, p < .01), meaning that path c is significant. When controlling for paths a and b - which is shown in model 5 - the relationship between time pressure and intention to leave is lessened, although still significant (β = .347, p < .01). To test the significance of the mediation effect, a Sobel test was performed1. The results show that the mediation effect is significant (z = 2.384, p < .05). Therefore condition 3 is also met, providing sufficient evidence to support the full mediation function of thriving on the positive relationship between time pressure and intention to leave (H3).
Figure 2. The impact of Time pressure x Job autonomy on Thriving
H4 predicted a moderation effect of job autonomy on the relationship between time pressure and thriving. To test this interaction hypothesis, the independent variable and the moderating variable were standardized. Z-scores were then used to compute the interaction term ‘time pressure x job autonomy’. Model 3 shows the results of the interaction effect while controlling for the individual relations of time pressure and job autonomy on thriving. This interaction effect is positive and significant (β = .167, p <
1 In addition, a model 4 analysis of the PROCESS macro (developed by Andre Hayes (2013)) was performed. The bootstrapping results also
showed a significant indirect effect of thriving on the relationship between time pressure and intention to leave at a 95% confidence interval, providing additional support for H3.
3,5
3,6
3,7
3,8
3,9
4
4,1
4,2
4,3
4,4
Low time pressure
High time pressure
T
h
rivi
n
g
Low job autonomy High job autonomy.05). H4 is therefore supported, meaning that job autonomy positively moderates the negative relationship between time pressure and thriving. Figure 2 shows the differential effects of time pressure on thriving given different levels of job autonomy: when job autonomy is high, the slope barely shows any movement whereas when job autonomy is low, the slope is steep. In other words, only when job autonomy is low, a higher level of time pressure significantly decreases the level of auditor thriving.
Table 3. Conditional indirect effect of time pressure on intention to leave at various levels of job autonomy and Index of moderated mediation
H5 is the all-encompassing hypothesis, proposing that job autonomy moderates the negative indirect effect (through thriving) of time pressure on auditors’ intention to leave. To test this hypothesis, the analysis procedure as prescribed by Preacher, Rucker and Hayes (2007) was followed. For this purpose, model 7 of the PROCESS macro for SPSS developed by Andre Hayes (2013) was used. By means of a bootstrapping procedure, the conditional indirect effects of time pressure through thriving on intention to leave at various levels of job autonomy was estimated. The results of these conditional indirect effects, as well as the index of the full moderated mediation model, are shown in Table 3. The full moderated mediation model is significant at a confidence interval of 95%, as the lower and upper confidence interval are both below zero (so the confidence intervals do not include a value of zero). Therefore H5 is accepted. However, the conditional indirect effect of time pressure only exists when job autonomy is low (- 1 SD, B = .190), as only in that condition the confidence intervals do not include zero. This holds for a confidence interval of 99%. So, when job autonomy is moderate (M) or high (+ 1 SD), thriving does not significantly mediate the negative indirect relationship between time pressure and intention to leave. This provides evidence for a conditional indirect effect of time pressure on intention to leave through thriving, which is conditional on job autonomy.
95% CI 99% CI
Job Autonomy Effect (B) SE Lower Upper Lower Upper
- 1 SD -1.153 .190 .061 .079 .317 .049 .376
M 0 .097 .050 -.003 .199 -.036 .239
+ 1 SD 1.153 .005 .071 -.151 .132 -.216 .188
Index of moderated mediation Index (B) SE Lower Upper Lower Upper
-.080 .038 -.161 -.015 -.201 .007
Note: N=140. Unstandardized coefficients are shown. Estimates of the indirect effects and the associated bias-corrected confidence intervals are based on resampling techniques using 5,000 bootstrapped samples. Values in bold are significant. CI = Confidence Interval.
5. DISCUSSION
The purpose of this study has been to answer the research question: ‘How does time pressure and job
autonomy impact thriving of auditors and their intention to leave the audit firm?’. This question
addresses important issues auditors are currently coping with in their daily practice as a result of recent developments in the sector, and puts these within a conceptual model of thriving at work, which is derived from self-determination theory (SDT) (Spreitzer et al., 2005). First, auditor turnover intention was addressed by examining the impact of time pressure and thriving on auditors’ intention to leave. As was hypothesized, the results show that time pressure is negatively related to thriving, which in turn is negatively related to intention to leave. In addition, a mediating effect of thriving on the positive relationship between time pressure and intention to leave was expected and found. This research contributes to the extant literature as the concept of thriving is relatively undeveloped in business settings and non-existent in the auditing literature. It shows that time pressure among auditors severely impacts the way in which they feel vital and experience learning, which contributes to our understanding of the concept of thriving at work. Furthermore, in line with earlier research, this paper finds that thriving individuals are less likely to leave the company (Carcello et al., 1991; Gammie & Whiting, 2013; Jones et al., 2010). Moreover, this research finds that, given the ubiquitous nature of time pressure within the auditing profession, enabling employees to thrive in their work could neutralize the strong positive effect of time pressure on intention to leave.
The outcomes are consistent with a recently published research on Dutch auditors conducted jointly by the NBA and Nyenrode Business University (De Vries & Herrijgers, 2018). This report addresses the causes and consequences of time pressure among auditors and their motives to leave the profession. In line with this research, the report finds that work overload is the single most often mentioned motive to leave the profession. Two other important motives found are related to challenging tasks to be performed and the working environment (De Vries & Herrijgers, 2018), which have some common ground with the dimensions of thriving and thus supports the negative relation found between thriving and intention to leave.
However, the results regarding the first hypothesis, which found a negative association between time pressure and thriving, are inconsistent with the recent publication of Prem et al (2017): they found a significant positive relation between time pressure and the learning dimension of thriving, and no significant relation between time pressure and the vitality dimension. There are two important differences in research design that could possibly explain the contradicting outcomes. The first explanation could be that Prem et al. (2017) measure the two dimensions of thriving separately, arguing that a finer distinction between the two components of thriving at work is preferred. This is fundamentally inconsistent with the model of thriving as developed by Spreitzer et al. (2005), who state that vitality and learning are two equally important components of thriving and should be considered
jointly. This research is, in contrast to the paper of Prem et al (2017), in line with the original model of thriving, which could explain part of the differential outcomes. The second reason could be that the research of Prem et al. (2017) covered knowledge workers, of which only 7% had the profession of either controller or auditor, whereas this research only considers auditors. As was discussed before, auditors face exceptionally high levels of time pressure, also when compared to other professions (Centraal Bureau voor de Statistiek, 2017). The different compositions of the populations could explain why the respondents differ in the degree to which they consider time pressure as a hindrance, and thus why the results have opposite directions.
The findings also indicate that job autonomy positively moderates the relationship between time pressure and thriving. As shown in Figure 2, there is a significant differential relation between time pressure and thriving in the low job autonomy condition as opposed to the high job autonomy condition. When job autonomy is low, the effect of time pressure on auditor thriving is quite strong: thriving decreases substantially when time pressure increases. However, this effect almost fully diminishes when job autonomy is high. This shows that job autonomy is a strong instrument to neutralize the negative effect of time pressure on auditor thriving. For the first time in an audit setting, empirical evidence has been found that shows the relevance of job autonomy within the socially embedded model of thriving, which argues that decision making discretion is an important contextual enabler of thriving (Spreitzer et al., 2005). Furthermore, this outcome supports SDT, as the theory states that autonomy is one of the three basic psychological needs which should be satisfied for employees to pursue self-determined motivation through growth striving behavior (Deci & Ryan, 2000).
The moderated mediation model which hypothesized that job autonomy moderates the negative indirect effect (through thriving) of time pressure and auditor’s intention to leave, was found to be significant and in line with H4. These results suggests that thriving only mediates the relationship between time pressure and intention to leave when job autonomy is low. This outcome is consistent with the transactional theory of stress, which argues that it is an individual’s appraisal of a stressful event that determines whether it is considered as either a challenge or a hindrance (Webster et al., 2011). As was expected, auditors’ individual appraisal of time pressure, and subsequently its effects on thriving and intention to leave, depends on other factors, in this case job autonomy. Namely, when job autonomy is low, time pressure is generally seen as a hindrance, whereas when job autonomy is high, auditors seem indifferent in their appraisal of time pressure. This reasoning is in contrast with earlier research (i.a. Cavanaugh et al., 2000; LePine et al., 2005; Widmer et al., 2012), which argues that time pressure at work mainly has positive outcomes. In these papers, time pressure was a priori classified as a challenge stressor and treated as such in the analysis. However, as pointed out by Webster et al. (2011), stressors (such as time pressure) should not a priori be classified as either a challenge or a hindrance according to the transactional theory of stress. This research supports the argument made by Webster et al. (2011) by demonstrating that taking into account other factors, such as job autonomy and the unique setting of
the auditing sector, matters in the appraisal of stressors and, subsequently, changes the direction of the associated relationships.
In conclusion, this research contributes to the existing literature by providing evidence in the audit context of the mediating role of thriving in the negative relationship between time pressure and auditor intention to leave. Furthermore, this research found that this relationship only holds when auditor job autonomy is low, as job autonomy has a moderating impact on the relationship between time pressure and thriving.
Limitations and directions for further research
Although this research has shown some interesting results, it has been affected by some limitations. As pointed out by Gertsson et al. (2017), survey data on turnover intention may correlate with actual behavior (Steel & Ovalle, 1984), but does not fully explain it. As intentions could change over time, any association between intentions and actual decisions is unsound (Sheeran, 2002). It takes time for intentions to turn into real actions (Sutton, 1998). Furthermore, most respondents were probably not in a situation in which they had to make a decision on whether to stay with or leave their firm at the time they were filling out the survey, which makes their answers purely hypothetical. Further research should address these limitations by exploring how intentions are manifested in actual behavior, by means of a longitudinal research approach.
Not only one’s intention to leave may change over time, also the degree of time pressure one feels could change during the year or even during one day (Prem et al., 2017). This research has been conducted at one point in time by means of a survey. Respondents were asked to fill out the survey halfway April, which is at the end of ‘busy season’, the yearly peak period for auditors due to the clustering of companies with the same fiscal year-end date (Sweeney & Summers, 2002). During busy season, workload significantly increases, leading to lower audit quality (López & Peters, 2012) and higher auditor burnouts (Sweeney & Summers, 2002). Consequently, it is reasonable to assume that the reported time pressure and vitality measures could be biased by the point in time in which this research has been conducted and therefore might not be reflecting year-averages. Even though the period of busy season is of particular interest for researchers and practitioners, future research should address this bias by conducting similar research in other periods. Moreover, a longitudinal research design could find differences between these periods or could even find differences during the course of a day.
One other limitation is that this research could not take the desired level of autonomy among respondents into account when assessing job autonomy. Discrepancy between actual and desired levels of autonomy could impact the relations this research has found. For example, this discrepancy could cause job strain (Elsass & Veiga, 1997), which would supposedly impact the measure of thriving. Recent research has found that when job demands are high and one’s need for job autonomy is high, but the actual job autonomy is low, this has a significant negative impact on intrinsic motivation (Yperen, Burkhard, &
Jonge, 2016). Further research should address the discrepancy between the actual and desired level of job autonomy and explore how this discrepancy would impact thriving and turnover intention.
All data for this research were obtained from only one source, which could cause common method bias to be present in the results. While the Harman’s single factor test showed satisfactory results below the 50% limit, it is not certain that common method bias is completely ruled out in this research. However, due to the satisfactory results from the Harman’s single factor test, it is unlikely that this bias would have a significant impact on the results. Also, it is inherent to the methods used in this research that no legit claims on causality between any of the variables can be made. As no variable is manipulated in the course of the research, this cross-sectional research only observed correlations between the variables. Further research should address this by adopting an experimental research design.
Furthermore, the external validity of the data might be limited. This research only assessed auditors within the Dutch setting. The Dutch audit sector is undergoing similar developments as in other countries, such as the US, Singapore, Australia and the UK. In these countries, audit firms have been under public pressure to improve audit quality as well, and excessive time pressure and high turnover intention are also manifest in these markets (Coram et al., 2003; Hiltebeitel & Leauby, 2001; Low & Tan, 2011; Willett & Page, 1996). Subsequently, within the international audit sector, the external validity of this research supposedly is adequate. However, it is uncertain whether the results from this research could be applied to other sectors. For example, many researchers found positive outcomes of time pressure in other, non-audit sectors (Crawford et al., 2010; LePine et al., 2005; Podsakoff et al., 2007; Prem et al., 2017), while this research finds adverse effects of time pressure within the audit sector. Apparently, auditors differ in their appraisal of time pressure as compared to other professions. As already mentioned, this could be due to the fact that the audit profession is one of the most stressful professions (Centraal Bureau voor de Statistiek, 2017). Nonetheless, it would be interesting to find whether these outcomes could be generalized towards other professions.
Finally, although several control variables were used in this research, not all known related constructs could be controlled for. Other variables, such as job satisfaction, organizational commitment, supportive climate and motivation are also found to have a positive influence on thriving and a negative influence on turnover intention (Carmeli & Spreitzer, 2009; Gertsson et al., 2017; Kalbers & Cenker, 2007; Paterson et al., 2014; Porath et al., 2012). This is supported by the results, as the relevant adjusted R2 scores range from 12 - 30%, suggesting that the dependent variables and the interrelationships must have additional determinants. Future research should focus on additional variables that could impact the relationships found in this research. Furthermore, it would be interesting to find whether there are any differences between Big-4 auditors and non-Big-4 auditors with regards to the relationships found in this research, as auditors at the largest firms tend to differ in their turnover intentions compared to smaller firms’ auditors (Gertsson et al., 2017; Hiltebeitel & Leauby, 2001).
Practical implications
In addition to the academic contribution, this research also provides audit firms with important practical insights. This research has acknowledged the excessive time pressure felt by auditors and its adverse consequences for auditor turnover intention. While a certain turnover rate is required to maintain the up-or-out system within audit firms, too much auditors leaving the firm impacts audit quality and is therefore undesirable (Herda & Lavelle, 2012). As a result, audit firms are looking for ways to retain their professionals. This research demonstrates that enabling auditors to thrive at the workplace is a way to compensate for high levels of time pressure. The results show that not only individuals benefit from stronger feelings of vitality and experiences of learning, also organizations profit from a thriving workforce. Besides already known outcomes of a thriving workforce, such as higher levels of job performance, job satisfaction and organizational commitment (Paterson et al., 2014; Porath et al., 2012), we now know that thriving is also a valuable instrument to retain employees.
A second valuable insight the results provide, relates to the degree to which auditors have freedom, independence, and discretion in scheduling the work and in determining the procedures to be used in carrying it out. Pressured by regulators, politicians and the general public, audit firms are imposing more and stricter requirements regarding the work to be performed by their auditors, subsequently leading to less job autonomy. However, this research shows that this could have detrimental effects on auditors’ thriving and their intention to leave the firm, and arguably, eventually on audit quality. While auditors experience a high level of time pressure, it only seems to affect those auditors’ thriving who feel that they have low job autonomy. When auditors feel their job autonomy is high, as demonstrated by the different slopes in Figure 2, time pressure does not affect them anymore. This important insight is relevant for managers and regulators, as their efforts to improve audit quality by imposing stricter rules and regulations could have converse and detrimental effects.
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