Audit firms that offer more flexible work-from-home options produce significantly lower quality financial audits.
March 31, 2026
Original Paper
Flexible Work Arrangement Practices and Audit Quality
SSRN · 6470261
The Takeaway
While remote work is popular, the study suggests it breaks the informal oversight and mentoring required to catch accounting errors. The data shows a direct link between favorable perceptions of flexible work and an increase in missed financial discrepancies.
From the abstract
This study examines the relation between audit firm flexible work arrangement (FWA) practices and audit quality. Our examination is motivated by recent debates regarding the potential tradeoffs of FWAs and concerns from audit regulators about the potential impact of FWAs on audit quality. We use Revelio Labs sentiment data to capture audit firm employees' perceptions of their firms' FWA practices, since prior work suggests that employee perceptions align with how FWA practices are implemented in