Stressed about Money: The Effect of Employee Financial Pressure on Financial Reporting Outcomes
研究发现员工财务压力会降低财务报告质量，表现为更多内部控制重大缺陷和报表重述，对审计师和管理者评估报告可靠性有参考价值。
SUMMARY This study investigates the effect of employee financial stress on financial reporting outcomes. Anxiety related to stress results in emotional exhaustion and reduced job performance. The conservation of resources theory predicts that anxiety caused by financial stress decreases employees’ work quality because anxiety drains individuals’ physical, cognitive, and psychological resources. Motivated by the conservation of resources theory, we expect and find that employee financial stress negatively affects financial reporting outcomes. Consistent with this prediction, we determine that employee financial stress is positively associated with material internal control weaknesses and restatements. The results are statistically and economically significant, and the results continue to hold after using alternative measures of employee financial stress and financial reporting quality. We conduct additional analyses to address endogeneity issues, and the inferences remain the same. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M40; M41; M49