Are joint audits associated with higher audit quality?

Abstract

This paper investigates and assesses whether a joint audit engagement results in higher audit quality compared to a single audit given audit firms’ characteristics and complexity of their clients’ activities. The research adopts a survey-based questionnaire sent to external auditors of five audit firms with international affiliation including two Big 4 firms to assess their perceptions about whether joint audit improves audit quality compared to a single audit. Also, interviews with audit partners and professors of auditing were made to check the reliability of the survey. Descriptive and inferential statistics are used to test the research hypotheses. The results reveal that joint audit enhances the quality of the audit as auditors in joint audits deliver high audit quality and ensure continuity with the client. The results also confirm the importance 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 to a single audit for listed companies compared to non listed companies even when there are discrepancies in the joint audit partners’ level of competence and experience. The study is among the first to survey the impact of joint audits compared to single audits on audit quality in an emerging economy. The study identifies valuable insights and provides recommendations to audit firms, professional and oversight bodies, and government to encourage the use of joint audits versus single audits to improve audit quality