Gendered Employment Status and Payroll Misstatements: Evidence on Audit Effort from Sierra Leone

This study examines whether gendered employment status is associated with payroll misstatements and audit effort in Sierra Leone, a post-conflict emerging economy where women are disproportionately concentrated in part-time and contingent roles. Using survey and audit data from 178 formal-sector firms, this study employs OLS regression and mediation analysis grounded in Agency Theory and internal control frameworks. Findings indicate that a higher female part-time ratio is positively associated with payroll misstatements (β = 0.52, p < 0.01), an effect amplified by manual payroll systems (β = 0.48, p < 0.05). Payroll misstatements fully mediate the relationship between female part-time concentration and audit effort (indirect effect = 0.198, 95% CI [0.062, 0.351]). Additionally, female contingent employment ratios are directly associated with higher audit effort even after controlling for actual misstatements (β = 0.34, p < 0.01). By linking the intersection of gender and employment status to measurable accounting outcomes, this study extends audit risk models to include workforce composition as a structural risk factor previously unrecognized in accounting research. Findings inform auditors, payroll administrators, and policymakers in strengthening payroll governance and reducing risks associated with employment inequality structures in emerging economy contexts.