Mandatory Joint Audit and Audit Quality in the Context of the European Blue Chips

Abstract

This study investigates audit quality under joint and single audit regimes with a sample of large European firms. Both, the economic relevance of these companies, and the fact that the impact of joint audit on audit quality should be stronger when the audited company is a blue-chip firm motivate the study. If mandatory joint audit were positively associated with audit quality, French firms, under mandatory joint audit since 1966, should present higher audit quality compared to their European peers. The results do not indicate this to be the case. Specifically, similar levels of discretionary accruals are observed for French and other European firms. Furthermore, for the first time in the literature, evidence is reported indicating that French firms may even present lower audit quality than their European peers, when audit quality is measured by the likelihood of just beating earnings benchmarks. These results are expected to inform the ongoing debate in several countries about joint audits.

Do audit attributes impact earnings quality? Evidence from India

“…3.2.3 Measurement of joint auditor (JA): (independent variable). We have created a binary variable having a value of "1" if more than one auditor audits the firm for a specific year; otherwise, "0" (Andr e et al, 2016;Garcia-Blandon et al, 2021;Ratzinger-Sakel et al, 2013).…”

“…Contemporary high-profile (Big-4) audit firms failed to play their role sufficiently, which attracted all to their quality regarding audit work (Al-Hiyari et al ., 2022; Alzoubi, 2016; Awuye, 2022; Houqe et al ., 2017). Joint auditors (JAs) expand the reliability of financial reporting, reduce information asymmetry and lower the cost of capital (Barghathi et al ., 2020; Garcia-Blandon et al ., 2021). In India, as per section 139(3) of The Companies Act 2013, the external audit may be conducted by more than one auditor jointly.…”

“…The present study has two significant contributions; first, we found studies (André et al ., 2016; Barghathi et al ., 2020; Garcia-Blandon et al ., 2021; Nurunnabi et al ., 2020; Ratzinger-Sakel et al ., 2013) on JAs related to developed economies like France, where joint audit is mandatory, and the USA and the UK, where there is no such compulsion; such studies are unsuitable for developing economies like India due to different economic structure. As per our knowledge, studies have not been done using a JA attribute for the Indian context; the present study attempts to fill this research gap.…”

Faktor-Faktor Yang Mempengaruhi Kualitas Audit Kepabeanan

“…Bahwa hasil penelitian berlawanan dengan penelitian Hegazy dan Ebrahim (2022) yang menggunakan sampel auditor eksternal yang berada di lima firma audit yang menyatakan joint audit memiliki pengaruh positif terhadap kualitas audit. Sedangkan, penelitian Velte dan Azibi (2016) menggunakan sampel perusahan yang berada di Jerman dan Perancis, dan penelitian Blandon, et al, (2021) dengan menggunakan sampel Constituents of the S&P350 EUROPE index menyatakan bahwa joint audit tidak memiliki pengaruh terhadap kualitas audit.…”