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The Impact of Workload Compression on Busy Season Auditor Switches
Dennis M. López, University of Texas - San Antonio
Gary F. Peters, University of Arkansas
ABSTRACT. The purpose of this paper is to answer the question of whether December year-end companies display a differential likelihood of switching auditors. The congregation of companies with fiscal years ending in December creates what is known by auditors as the busy season. The level of workload compression generated by the busy season is measured in this study as the ratio of December year-end sales to total sales audited by the firm during a year. Using a sample of 42,729 firm-year observations we find evidence indicating that December year-end companies more likely to switch auditors than non-December year-end companies. The results of this study are stronger when workload compression is measured as a local, city-specific phenomenon.
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