When Audit Time Runs Short: Understanding the Impact of Time Budget Pressure on Audit Quality

Abstract

Time budget pressure has become one of the most significant challenges facing auditors as increasing regulatory requirements, stakeholder expectations, and organizational complexities place greater demands on audit engagements. Excessive time pressure may adversely affect auditors’ ability to perform critical audit activities and ultimately compromise audit quality. This study investigates the impact of time budget pressure on five dimensions of audit quality—meticulous planning of audit tasks and resource allocation, effective supervision of the audit team, gathering sufficient and appropriate audit evidence, preparing transparent and independent reports, and strict adherence to professional standards. In addition, the study examines the moderating role of mitigation strategies in reducing the negative consequences of time budget pressure. A quantitative research design was adopted, and data were collected from 281 auditors working in Iraqi banks using a structured questionnaire consisting of 25 measurement items. The proposed model was analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings reveal that time budget pressure exerts a significant negative effect on all dimensions of audit quality. The results further indicate that mitigation strategies significantly weaken the negative effects of time pressure on planning, supervision, and evidence collection, but do not significantly moderate its effects on reporting quality and adherence to professional standards. The study contributes to the auditing literature by conceptualizing audit quality as a multidimensional construct and by demonstrating the differential effectiveness of mitigation strategies across audit activities. Practical implications for audit firms, regulators, and professional bodies are also discussed.