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New Research: What Happens When Auditors Get the Flu?
The flu causes U.S. employees to miss 17 million workdays per year at an estimated $7 billion annually in lost productivity, according to the Centers for Disease Control and Prevention. How does this productivity loss affect workers during flu season, which falls in the months between December and March? New research by Bentley University doctoral student Landi Morris and Professor Rani Hoitash examines the impact of the flu on the work of auditors employed by public accounting firms, whose heaviest workload falls during peak flu season — and what that means for their clients.
“It’s no surprise that when employees are sick with the flu, the quality of their work declines,” says Hoitash, Bentley’s John E. Rhodes Professor of Accountancy. “But what may be surprising is that clients pay more when their auditor gets sick due to inefficiencies created by people working when they have the flu.”
The study, which focuses on the Big 4 auditing firms, identified specific ways that auditors’ work suffers due to the flu, and how that affects clients:
- In states most impacted by the flu, the quality of the work performed by auditors declines, impacting the reliability of their work.
- In states most impacted by the flu, the length of time it takes to file the audit report increases. This suggests that when auditors are sick, they are less efficient in their work, and it takes more time to complete the deliverables of the audit.
- In states most impacted by the flu, service fees paid to the auditor increase. This suggests that as auditors experience inefficiencies due to sick personnel, the costs of these inefficiencies are passed to clients, resulting in higher fees.
- The flu has a more significant negative impact on firms that service more complex clients. As the complexity of the work increases, the impact of employees being sick is more likely to result in a decline in the quality of auditors’ work.
Although the study focuses on audit firms, the findings likely apply to a broader sample of companies that operate in states with high flu activity. Morris notes important takeaways for public accounting firms and other companies interested in lessening the impact of the flu on the quality of their employees’ work.
“Companies should reexamine their work culture and whether it encourages employees to stay home when sick,” she says. “Workplace cultures that promote a strong work-life balance may lessen threats to the quality of work that happen when employees feel pressure to go to work when they are sick.”
Scheduling additional personnel is also an important step that firms can take during flu season. “Companies should assess whether they have sufficient resources to make up for productivity losses when employees are out sick,” Morris says.
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