The Impact of Auditors' Job Stress on Audit Quality in Companies Listed on the Tehran Stock Exchange

Abstract

This study investigates the impact of auditors' job stress on the quality of auditing in companies listed on the Tehran Stock Exchange (TSE). The primary objective is to analyze the relationship between the psychological pressures inherent in the auditors' work environment and the quality of the outcomes of the audit process. Two main hypotheses were tested: the first examines the direct impact of job stress on audit quality, and the second analyzes this relationship within the specific context of initial audits. Multivariate regression models were employed to test the hypotheses. The study utilized financial data from a sample of 167 companies listed on the TSE over a five-year period from 2019 to 2023. To ensure the validity of the models, several statistical tests were conducted, including for data normality, variable stationarity, multicollinearity among independent variables, homoscedasticity, and the absence of autocorrelation in the residuals. The results from the first model indicate a significant and negative effect of job stress on audit quality, suggesting that increased stress levels among auditors lead to a decrease in the quality of audit reports. The second model, which specifically examined the impact of job stress in initial audits, revealed an even more pronounced negative relationship. This indicates that the adverse effects of job stress on audit quality are exacerbated during the initial stages of the auditor-client relationship. Overall, the findings of this research highlight job stress as a critical factor that can undermine audit quality. The study emphasizes the importance of considering the psychological well-being of auditors in the design of audit procedures and in the human resource management practices within the auditing profession.