Employee Satisfaction and Work-Life Balance in Accounting Firms and Audit Quality

What is it about?

The PCAOB’s audit-quality framework posits that superior inputs are essential for achieving high audit quality. We use crowdsourced employee-level reviews of accounting firms from Glassdoor.com to examine some of these inputs and test whether accounting firm’s internal characteristics explain employee satisfaction and audit quality. First, we provide background for the setting in which audit personnel are employed by documenting how accounting-firm employees in general perceive their employers. We then empirically test how satisfaction and work-life balance of audit employees at accounting firms relates to the audit quality of their clients. Our evidence suggests that “career opportunities,” “senior management,” and “culture and values” play a more important role in employees’ satisfaction than do “compensation and benefits” or “work-life balance.” However, while work-life balance is not among the most important factors that are associated with audit employees’ overall satisfaction, better work-life balance is nonetheless associated with higher audit quality.

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