Date of Award
8-6-2019
Degree Type
Thesis
Degree Name
Master of Philosophy (MPHIL)
Discipline
Business
Department
Accountancy
First Advisor
Prof. SU Lixin Nancy
Second Advisor
Prof. ZHANG Yue
Abstract
Previous studies examining whether and how auditor busyness influences audit outcome use auditors' clientele size as a proxy for auditor busyness. The result of these studies may be biased due to the endogeneity arising from the selection of clients by auditors as well as the selection of auditors by clients. By leveraging on the natural disasters as exogenous events to clients, I study whether the auditor busyness, induced by the additional assurance work performed for disaster-affected clients, influences the audit outcome of the non-disaster-affected clients (i.e.: the remaining clients). Consistent with the Limited Attention Theory (Cherry, 1953; Kahneman, 1973), I find auditor busyness is associated with a lower audit quality and a higher likelihood of non-timely filing of engagements with non-disaster-affected clients. I also find that auditors with a concentration of busyness, induced by the insufficient time on audit planning, the constraints in audit resources and the lack of industrial knowledge/prior audit experience，are associated with an even lower audit quality of engagements with their non-disaster-affected clients. The results are robust to different audit quality proxies and the additional test which further control for the audit firm individual effect. This study, using a new identification strategy of busy auditor, adds to the debate on the consequence of auditor busyness.
Language
English
Copyright
The copyright of this thesis is owned by its author. Any reproduction, adaptation, distribution or dissemination of this thesis without express authorization is strictly prohibited.
Recommended Citation
Lau, S. M. (2019). Does auditor busyness influence audit outcome? Further evidence (Master's thesis, Lingnan University, Hong Kong). Retrieved from https://commons.ln.edu.hk/otd/55/