The Benefits and Burden of Joint Audits: Do They Improve Audit Quality?

Abstract

Purpose: This paper investigates and assesses whether a joint audit engagement results in high audit quality compared to a single audit given the various characteristics of the audit firm as well as the complexity of the clients' activities.Design/methodology/approach: The research adopts a survey-based questionnaire sent to external auditors of five audit firms with international affiliation including two of the Big 4 to assess their perceptions about whether joint audit enhances audit quality compared to a single audit. Also, interviews with professionals and academics in the auditing field were made to get their opinions concerning joint versus single audits. Descriptive and Inferential statistics and nonparametric tests were used to test the research's hypotheses. FindingsThe results reveal that joint audit does enhance the quality of the audit as joint auditors are alert to deliver audit quality and ensure continuity with the client. The results also confirm the importance and necessity to perform joint audit engagements involving one of the Big 4 with one audit partner possessing industry specialization related to the audit engagement. However, no variation was found in audit quality in a joint audit compared with a single audit for listed companies compared with non-listed companies even when there are discrepancies in the joint audit partners' level of competence and experience relevant to the audit engagements.Originality/value -This study is among the first that survey the impact of joint audit compared to single audit on audit quality in an emerging economy. The study also identifies valuable insights for those two types of the audit with recommendations for the use of joint audit for business enterprises to enhance audit quality.Limitations The research study relied on a sample of auditors and audit firms for investigating the effect of joint/single audits on audit quality.