Determinants of audit staff attrition : a Maltese analysis

Abstract

PURPOSE: The main objective of this study is to explore the determinants that lead to actual career change of audit employees employed in audit firms. Moreover, this study also sets out to analyse whether any differences arise in the significant determinants based on company size, rank in audit firm, gender and the generation group that the participants pertained to. DESIGN: A mixed methodology approach was undertaken in conducting this study. Data was gathered by the distribution of an online questionnaire, targeted to auditors working in audit firms and those that no longer work in audit firms. The data was analysed using a binary logistic regression model, as well as conducting further statistical tests. The statistical analysis was further corroborated by carrying out semi-structured in-depth interviews with audit executives, as well as current and former auditors. FINDINGS: From the sample collected in this study, 62% are found to be still working in audit firms while 38% have left audit firms and pursued other jobs outside the profession. The determinants which are found to impact actual career change are healthy lifestyle, work-life balance, employment conditions and the operating environment. Moreover, it was found that there is no difference between company sizes for each of the significant determinants, that there is a difference between the ranks in audit firms for the determinants work-life balance and employment conditions only, and that there is a difference based on gender for the determinant employment conditions only. Furthermore, it was found that generational differences do exist for the determinants work-life balance and employment conditions. These findings were further enhanced by the findings from the in-depth interviews. CONCLUSION: The human element of an audit firm is an important resource for such firms and can cause huge costs if audit firms have high turnover rates. Audit firms should focus more on keeping the thriving employees to avoid high attrition costs by focusing on retaining employees based on what motivates them. VALUE: This study is the first to analyse the determinants of audit staff attrition in Malta in such a holistic manner, by making use of a regression model.