Jisoo Park

We examine how audit partners’ multi-office assignments—auditing clients across multiple offices of the same audit firm within the same month—affect earnings management and pose ethical risks to maintaining their professional standards of competence and due care. Distinguishing our mechanism from prior research on workload volume and geographic distance, we theorize that the context-switching costs inherent in multi-office assignments impose a unique cognitive burden that depletes a partner’s capacity to rigorously evaluate subjective accounting estimates. Using 9340 observations of U.S. public company audits conducted in December from 2016 to 2021, we examine within-partner variation in earnings management captured using discretionary accruals within the same office as the same partner shifts between single-office and multi-office assignments. We find that a partner’s monitoring effectiveness declines substantially, with absolute discretionary accruals increasing by up to 31% when partners switch to multi-office assignments. Importantly, this decline is independent of workload volume and affects the partner’s entire portfolio regardless of where the audits are conducted. Our findings contribute to research on audit partners’ roles in financial reporting quality, auditor workload, and accounting ethics by highlighting how the structural design of partner deployment can undermine the constraint of earnings management, creating ethical risks that firms must proactively manage.