Survey On The Differential Effects Of Time Deadline Pressure Versus Time Budget Pressure On Auditor Behavior

Abstract

<span>The study examines the differential effects of time deadline pressure versus time budget pressure by surveying both senior and staff auditors in public accounting firms. The responding senior auditors reported experiencing time deadline pressure more frequently than time budget pressure over the preceding year and a majority of them indicated they experienced more stress from time deadline pressure than from time budget pressure. However, the responding staff auditors experienced time deadline and time budget pressures about equally over the preceding year and experience3d about equal levels of stress from the two types of time pressure. In contract to the frequency and stress results noted above, the results also indicated that both senior an staff auditors perceived time budget pressure to be more associated with reduced audit quality, reduced job satisfaction, and increased underreporting of chargeable time than time deadline pressure.</span>

Auditors' Efficiency Motivated Evaluation

“…This suggests that in addition to mitigating some cognitive biases (as discussed in the previous section) experience may mitigate some pressure effects. Consistent with this notion, Kelley, Margheim, and Pattison (1999) find that seniors perceived lower levels of time budget pressure than staff. Moreover, seniors felt more competent to deal with time budget pressure than staff, and thought that staff were more likely to accept weak client explanations and fail to research accounting principles when time budget pressure is high.…”

The Impact of Perceived Ethical Culture of the Firm and Demographic Variables on Auditors’ Ethical Evaluation and Intention to Act Decisions

“…Consistently high levels of dysfunctional behaviours in audit firms have been reported in both Ireland and the U.S. over the last few decades (Arnold et al, 2002;Kelley and Margheim, 1990;Pierce and Sweeney, 2004;Rhode, 1978). QTB has been associated with both time deadline and time budget pressures (Kelley and Margheim, 1999;Sweeney and Pierce, 2004), whereas URT is only relevant in the context of time budget pressure (Sweeney and Pierce, 2006). Regarding the ethicality of these behaviours, QTB has been described as an ethical issue, as it 'has consequences for others and involves choice or volition on the part of the auditor' (Coram et al, 2008, p. 131) and this also applies to URT.…”

The Effects of Time Budget Pressure and Intentionality on Audit Supervisors' Response to Audit Staff False Sign‐off

“…Another factor that may affect supervisors' reporting intentions is the level of time deadline pressure experienced on the audit. Both Sweeney and Pierce (2004) and Kelley et al . (1999) found that time deadline pressure (in addition to time budget pressure) is associated with reduced audit quality acts, including false sign‐off.…”

“…For example, Pierce and Sweeney (2004) surveyed second‐ and third‐year staff and senior auditors in Ireland. Thirty‐six percent of respondents indicated that time budgets are either ‘very tight, practically unattainable’ or ‘impossible to achieve,’ 47 percent believed that budgets are ‘attainable with considerable effort,’ and 17 percent felt that budgets are either ‘attainable with reasonable effort’ or ‘very easy to attain.’ In another study, Kelley et al . (1999) asked staff and seniors in the US about the amount of time budget pressure they had experienced over the preceding year.…”

“…Approximately 60 percent of his respondents admitted to committing false sign‐off during their career, and the reasons given for the behavior, in order of descending frequency, were (1) time budget pressure, (2) the auditor committing the false sign‐off considered the audit step unnecessary, (3) the audit step was not understood, (4) the client had imposed deadline pressure, and (5) the auditor experienced laziness or boredom with tedious work assignments. Studies since Rhode (1978) have further investigated the incidence and antecedents of false sign‐off (e.g., Alderman & Deitrick, 1982; Buchman & Tracy, 1982; Margheim & Pany, 1986; Kelley & Margheim, 1987, 1990; Raghunathan, 1991; Margheim & Kelley, 1992; Kaplan, 1995; Otley & Pierce, 1995, 1996; Malone & Roberts, 1996; Willett & Page, 1996; Reckers, Wheeler & Wong‐on‐Wing, 1997; Kelley, Margheim & Pattison, 1999; Herrbach, 2001; Coram et al ., 2003, 2004, 2008; Donnelly, Quirin & O'Bryan, 2003; Shapeero et al ., 2003; Sweeney & Pierce, 2004; Pierce & Sweeney, 2004, 2005, 2006; Sweeney et al ., 2010; Hyatt & Prawitt, 2011). Although the percentage of auditors admitting to false sign‐off fluctuates from study to study, little question remains that individuals falsely sign off on a fairly regular basis.…”