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    Auditor Workload Compression and Busy Season Auditor...
    research summary posted October 20, 2014 by Jennifer M Mueller-Phillips, tagged 02.0 Client Acceptance and Continuance, 02.06 Resignation Decisions, 10.0 Engagement Management, 10.01 Budgeting and Audit Time Management 
    Auditor Workload Compression and Busy Season Auditor Switching
    Practical Implications:

    The distribution of fiscal year-end companies in an auditor’s client portfolio can place significant strains on the resources of a CPA firm. Auditors are cautioned about the damaging effects of workload compression on the auditor-client relationship. Policymakers should consider auditors’ workloads when enacting new rules and regulations.  


    López, D. M., and G. F. Peters. 2011. Auditor Workload Compression and Busy Season Auditor Switching. Accounting Horizons 25 (2):357-380

    auditor switching, busy season, December year-end, workload compression
    Purpose of the Study:

    This study investigates the impact of the busy season and auditors’ workload compression on audit resources and the likelihood of auditor switching.

    Design/Method/ Approach:

    This study uses data from Compustat and Audit Analytics to get 10,238 observations comprised of 3,525 different companies across 163 different local auditor offices. 

    • December year-end companies have a lower likelihood of auditor switching than that of non-December year-end companies. This result is consistent with economic predictions of high switching transaction costs for busy season companies and their auditors.
    • The study also finds that the likelihood of switching increases with the level of auditor workload compression, providing evidence that workload compression has a damaging effect on the auditor-client relationship.
    • The likelihood of auditor changes is greater when there are more competing auditors within geographical proximity.
    Client Acceptance and Continuance, Engagement Management
    Budgeting & Audit Time Management, Resignation Decisions