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Study links audit staffing to audit quality

Tammy Whitehouse | March 22, 2016

Using a little noticed filing by audit firms, recent academic research has established a statistical link between heavy workloads for auditors and reduced audit quality.

The emerging study from professors at the University of Alabama and Louisiana State University finds where audit engagement workload is high, companies have significantly higher abnormal discretionary accruals, are more likely to restate earnings, and are less likely to get a going concern opinion even when signs of distress are present.

“This is the first document we know of that speaks to where audit firms put their people,” says co-author Steve Buccheit. “A huge amount of audit firm employee time is going to nonpublic clients.”


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