An examination of a pragmatic approach to minimizing underreporting of time

Purpose: This paper aims to propose and examine a pragmatic approach to minimizing auditors’ underreporting of time. Specifically, the study examines the effects of time budget pressure (TBP) and reported time use policy (RTUP) on time underreporting. Design/methodology/approach: This paper uses a 2 × 2 between experimental design. The participants are 130 undergraduate accounting students and they completed a ratio-based task. The online experiment manipulated TBP and a RTUP. Findings: This study shows a RTUP reduces time underreporting, especially when TBP is high. Practical implications: This study is useful to audit firms because it provides a feasible solution to minimizing time underreporting. Social implications: Studies show that firm culture affects the dysfunctional behavior of time underreporting. Consequently, this study recommends that firms influence the culture around time reporting through an upfront communication of a use policy. Originality/value: Studies on time underreporting exist, but formal studies on solutions to the issue are sparse. The authors propose a solution to the issue of time underreporting, which is a RTUP.