The Shadow of Peer Death Among Rank-and-File Employees: Evidence from Audit Office

Using a unique dataset of deceased certified public accountants (CPAs) in China, we document that auditors who have experienced the death of a peer CPA from the same office are less likely to issue modified audit opinions, indicating impaired audit quality. Accordingly, we argue that heightened death awareness and corporate social responsibility (CSR) awareness, triggered by the death of a work peer, lead to death anxiety, intrinsic-value pursuit, and reduced commitment to the employer, thereby hindering both work ability and work commitment during the audit process. Moreover, the power of peer death is amplified by both self-relevance and self-exposure to deaths perceived by living auditors. Since most of the deceased CPAs in our sample are not signing CPAs who lead audit projects, our results illustrate the significant negative impact of peer death on work performance at the rank-and-file employee level. As employee deaths are frequently linked to the prevalent burnout culture and show a growing trend in recent years, our findings timely reveal the economic costs of the toxic workplace environment. This practically implies the critical importance of promoting a safe and healthy working environment ex ante and providing appropriate bereavement support for employees affected by a colleague’s death ex post.