Joint Audit Research Articles

The impact of auditor attributes and firm size on financial reporting timeliness of listed firms

This empirical study examines the impact of auditor attributes and firm size on financial reporting timeliness among listed firms in Nigeria. The study employs an ex-post facto type of research, with a quantitative design covering a ten-year period (2013–2022). The sample size comprises sixty-six (66) non-financial firms listed on the Nigerian Exchange Group (NGX). Based on data extracted from the audited annual reports of the sampled sixty-six firms, the robust regression model results reveal that joint audits contributed considerably to shorter financial reporting lags, underscoring the value of collaborative audit efforts in streamlining the audit process. Audit fees maintained a positive significant effect on the reporting lag of listed Nigerian firms. However, audit switch, client firm size, audit opinion, and audit firm size all maintained insignificant effects on the financial reporting timeliness of the Nigerian listed firms investigated. Therefore, the study recommends that listed firms should rather opt for affordable joint audits due to their efficiency in streamlining the audit process. Equally, the study recommends that listed firms should maintain long-term relationships with auditors to leverage increased familiarity, yet remain cautious of likely complacency and breach of auditing ethical guidelines that can arise from prolonged engagements.

The Impact of Adopting the Joint Audit Method on the Quality of the Jordanian Certified Public Accountant Report

The Impact of Adopting the Joint Audit Method on the Quality of the Jordanian Certified Public Accountant Report

The development of the European Union auditing research over the past decade: a systematic literature review and future research opportunities

Purpose The purpose of this study is to provide a systematic review of research development on auditing in the European Union over the past decade and suggest future research directions. Design/methodology/approach Following the PRISMA protocol, the authors systematically reviewed the relevant literature and conducted a qualitative content analysis of 107 studies on auditing in the European Union published between 2012 and 2023. Findings The results indicate increased auditing literature in the European Union from 2012 to August 2023. Around 40% of the papers were focused on six nations: Germany, Spain, Italy, the UK, Sweden and France. Additionally, 35.5% of papers have been published in three major journals: Accounting in Europe, International Journal of Auditing and the European Accounting Review. Moreover, 82.24% of papers used quantitative methods, with a few using qualitative or mixed methods. Also, most of the studies in the sample endorsed the European Union’s auditing reforms, which included implementing a cap on nonaudit fees and enhancing the independence of audit committees. Contrary to this viewpoint, multiple studies have expressed disagreement with enforcing a total prohibition on nonaudit services, as certain services can enhance auditing quality. Similarly, other studies have contested the necessity of mandatory auditor rotation every 10 years, citing the significant additional expenses associated with this practice. Finally, further studies supported the European Union’s decision to make the joint audit voluntary, as it is related to high audit fees and low audit quality. Research limitations/implications The limitations of this research primarily stem from the authors’ choices in selecting the database and defining the criteria for searching the studied papers. Practical implications This paper offers valuable insights into the future research prospects in the European Union’s auditing field. Hence, this analysis can be helpful for researchers and practitioners in developing this field based on future research recommendations and the identified themes. Originality/value To the best of the authors’ knowledge, this paper is the first study to systematically review the developments of the European Union auditing literature over the past decade.

The Role of Activating Joint Audit Programs in Reducing The Exchange Rate Volatility Risks "A Field study"

The Role of Activating Joint Audit Programs in Reducing The Exchange Rate Volatility Risks "A Field study"

Non-Big 6 audit firms’ access to external resources through inter-organisational relationships

Small audit firms try to reduce their resource constraints in serving clients by creating inter-organisational relationships (IORs) through membership in accounting networks or in agreements with individual firms. Through these relationships, firms have access to audit manuals/methodology, personnel, and may perform joint audits and joint marketing of their audit services. We identify the existence of IORs from PCAOB Form 2 filings and test whether audit quality and fees vary cross-sectionally as a function of the specific resource obtained from the IOR. We find evidence that firms with access to audit technology through IORs charge higher audit fees and provide higher quality audits, in terms of smaller clients’ performance-matched discretionary accruals, higher auditors’ likelihood of issuing going concern opinions to financially distressed clients, and fewer audit deficiencies identified in PCAOB inspection reports. The findings highlight the importance of access to audit technology through IORs in improving small audit firms’ real and perceived audit quality.

The Role of Joint Audit in Reducing Cases of Financial Default in Banks Listed on the Iraq Stock Exchange

The method of joint auditing is not a recent appearance, but it is needed at the present time due to the occurrence of many global problems and crises. The research problem was represented by the increasing cases of financial distress of economic units, especially the collapse of economic units that occurred in the recent global crises. The research was based on the hypothesis that applying The method of joint auditing in economic units helps in reducing cases of financial distress, as the research aimed to measure the extent to which joint auditing can reduce the occurrence of cases of financial distress in economic units listed on the Iraq Stock Exchange. The research included 14 private banks listed on the Iraq Stock Exchange. Iraq Securities Exchange as a sample for a period of ten years from 2011 to 2020. The research used the survey method to measure the application of the joint audit method, and used the KIDA model to measure financial distress in the research sample. The most important results of the research were that financially distressed units decreased with the application of the joint audit method, that is, whenever there was a joint audit, the incidence of financial distress in economic units decreased.

Sustainability assurance joint provision and assurance statement readability: does the assurance provider gender diversity matter?

PurposeThe primary objective of this paper is to investigate the relation between the joint provision of sustainability assurance and the readability of sustainability assurance statements. Additionally, it explores whether the presence of a female assurance partner influences the relation between the joint provision of sustainability assurance and the readability of sustainability assurance statements.Design/methodology/approachWe analyzed a dataset comprising 882 firm-year observations from companies operating in sustainability sensitive industries for the period that spans the years 2016–2018.FindingsThe research indicates that joint sustainability assurance provision is associated with a more readable sustainability assurance statement, consistent with the “four-eyes” principle. Furthermore, the presence of a female assurance provider influences the joint assurance provision’s impact on sustainability assurance statement readability. Collectively, these results remain robust as they hold unchanged after controlling for endogeneity concerns.Research limitations/implicationsThis study provides novel insights into the recent sustainability assurance literature, being the first to examine joint assurance provision, assurance partner gender and sustainability assurance statement readability.Practical implicationsThis study has the potential to catalyze regulatory and policy initiatives by providing compelling evidence in favor of mandating joint audits within the area of sustainability assurance practices. Additionally, this research contributes to the ongoing discussion about gender diversity in accounting and nonaccounting assurance firms, providing evidence of the positive impact of female assurance partners on sustainability assurance statement readability.Originality/valueThe regression results provide preliminary evidence on how the presence of a female audit partner influences the relationship between the sustainability assurance joint provision and sustainability assurance statement readability, an issue that has not been examined before.

Measures for enhancing auditor independence: Perceptions of spanish non-professional investors and auditors

Auditors fulfill a crucial societal role by increasing the credibility of financial reports, which requires that appropriate audit quality be provided and auditors are factually independent and perceived as such. So far, regulators and researchers have focused on a few measures for improving independence, namely the prohibition of non-audit services (NAS), audit firm and audit partner rotation, and joint audits. Despite these regulatory initiatives, accounting scandals still happen, and the independence of the auditors involved is questioned. Therefore, this explorative study aims to identify alternative measures that may strengthen auditor independence. Non-professional investors and auditors participated in a survey to identify promising independence-enhancing measures.Surprisingly, not only non-professional investors but also auditors support the implementation of many instruments. Non-professional investors rate measures related to oversight, controls, and sanctions as particularly useful. Likewise, auditors perceive measures for oversight and control as helpful but rank most sanctions lower than non-professional investors. They also support a stricter civil liability and rank some direct independence-improving measures as highly useful. Overall, the participants perceive a greater need for improving the independence of public interest entity (PIE) auditors.This explorative study widens the research horizon by adding alternative measures for improving independence in appearance. Thus, researchers may identify promising avenues for future research. Also, the paper is of interest to regulators and potentially helps in setting independence standards. Auditors and audit committees can identify opportunities for taking voluntary actions to ensure factual and perceived auditor independence.

Auditors’ characteristics and timeliness of listed family-owned firms in Nigeria

Research question: What are the effects of auditors’ characteristics on timeliness of financial reporting among listed family-owned firms in Nigeria? Motivation: Timely issuance of audited annual financial report is highly desirable to various stakeholders against top management insider trading on the accounting information of which family-owned listed firms is highly prone to involve. Idea: This study examined the effect of auditor’s characteristics on timeliness of listed family-owned firms in Nigeria. Specifically, the study investigated the extent at which auditor’s type; audit opinion; audit fee; auditor’s tenure; and joint audit affect timeliness of financial statements of listed family-owned businesses in Nigeria. Data: The data used and evaluated covered a period from 2012 to 2021, and were drawn from 47 listed family-owned firms in Nigeria. The secondary data were obtained from MachameRatio database. Tools: Both descriptive statistics and partial least square regression analyses were performed. Findings: The robust test performed revealed that Big-4 audit firms, audit opinion and audit tenure have positive effect, while audit fee and joint audit impound negative effect, on timeliness of financial statements of listed family-owned firms in Nigeria. However, the result is statistically significant for audit opinion, audit tenure and audit fee. Contribution: The implication of the findings is that audit opinion and audit tenure enhance timely issuance of the financial reports of listed family-owned firms in Nigeria. This study’s contributions to the body of knowledge include exploring the position of auditor’s features on timeliness of financial statements of listed family-owned firms in Nigeria which extant studies have scarcely investigated. The study recommended that listed family-owned firms in Nigeria should engage auditors for longer audit tenure among others.

The moderating effect of the interaction between joint audit and accounting conservatism on the association between corporate governance and corporate performance

The moderating effect of the interaction between joint audit and accounting conservatism on the association between corporate governance and corporate performance

The Effect of Joint Audit on Audit Quality: The Perceptions of Accountant Exports and Banking Mangers in Algeria

This study examines the impact of joint audits on audit quality. It employs a survey-based approach, utilizing a Likert-type questionnaire distributed to external auditors and bank managers to gauge their perspectives on whether joint audits enhance audit quality. The survey involved auditors and managers from the Regional Directorate of Exploitation in 20 Algerian banks. The findings indicate a correlation between joint audits and audit quality, with respondents expressing the belief that the implementation of joint audits would positively influence audit quality. This research is one of the pioneering efforts to investigate the effects of joint audits on audit quality within the Algerian banking sector. It offers valuable insights and puts forth recommendations for audit firms, professional and oversight bodies, as well as the government, emphasizing the significance of joint audits in ensuring audit quality.

The Impact of Joint Audit Relationship with The Local and International Experience of External Auditors on Audit Quality

The purpose of the research: This study aims to investigate the effect of joint audit on audit quality through the experience of the external auditor whether local or international. Data and materials and methodology: This study uses a random sample of 43 Yemeni legal auditors in Yemeni audit offices and firms. The questionnaire was used as a tool for data collection, and the data were analyzed using regression and path analysis using SPSS software. Results: The results show that joint audit has a positive and significant effect on the local external auditor’s experience, but not on the international external auditor’s experience. The results also show that the external auditor’s experience has a positive and significant effect on audit quality, but joint audit does not have a direct significant effect on audit quality. However, joint audit has an indirect significant effect on audit quality through the local external auditor’s experience, but not through the international external auditor’s experience. Main findings: The results of this study indicate that joint audit contributes to raising the level of quality and professionalism in audit reports and helps to develop the external auditors’ experience and improve their performance in report preparation. These results are consistent with some of the theories and previous studies that confirmed the role of joint audit in enhancing audit quality and external auditors’ experience. Kaywords: joint audit, international experience of external auditor, local experience of external auditor, audit quality.

Do Joint Audit Have an Impact on Audit Quality: A Comparison Between Mandatory and Voluntary Regulation of Joint Audit

Do Joint Audit Have an Impact on Audit Quality: A Comparison Between Mandatory and Voluntary Regulation of Joint Audit

The effect of accounting conservatism on firm performance-the moderating role of joint audit

The effect of accounting conservatism on firm performance-the moderating role of joint audit

The moderating effect of joint audit on the relationship between the readability of financial statements footnotes and audit effort: evidence from Egypt

The moderating effect of joint audit on the relationship between the readability of financial statements footnotes and audit effort: evidence from Egypt

The effect of applying joint auditing in reducing agency problems: Applied research in private joint stock companies / Khaleeji Commercial Bank

هدفت هذه الدراسة الى اختيار اثر تطبيق التدقيق المشترك في تخفيض مشاكل الوكالة وذلك باختيار اكثر من مراقب حسابات مشتركين في عملية التدقيق بأسلوب التدقيق المشترك وهو احد اساليب التدقيق حيث يكلف اثنين من مراقبي الحسابات مستقلين بتدقيق البيانات المالية واصدار تقريراً مشتركاً يكونان مسئولان عنه مسؤولية تضامنية مشتركة حيث ظهر هذا النوع في كثير من البلدان في الفترة الاخيرة خاصتاً بعد الازمات المالية العالمية الاخيرة من اجل استعادة ثقه مستخدمي هذه التقارير واستناداً الى نظرية الوكالة فان الادارة تسعى الى استغلال الصلاحيات الممنوحة لها للإظهار الجوانب الايجابية عن الادارة تلك الشركات والظهور امام المالكين بالوضع الجيد مستغلين المرونة بالمعايير المحاسبية اضافة الى الاهتمام بالمصالح الشخصية على حساب الملاك ولغرض الحد من هذه الممارسات والافعال يجب اتباع عدة اليات من قبل المالكين للحد من تضارب المصالح بين المدراء والمالكين والحد من التلاعب بالسياسات المالية والمحاسبية وأحد هذه الاليات هو التدقيق المشترك حيث يهدف هذا البحث الى بيان أثر تطبيق التدقيق المشترك في الحد من مشاكل الوكالة

The Impact of Implementing Good Corporate Governance Mechanisms and Compliance Programs in Combating Corruption in Egyptian Companies: A Case Study from Egypt

In recent years, there has been increasing interest and demand for the application of good corporate governance mechanisms and compliance programs as a means of reducing corruption in institutional companies. Since corporate corruption is widespread in all societies, both developed and developing, and since corruption has a serious impact on economic, sustainable, and social development, there has been widespread agreement that the application of good corporate governance mechanisms and compliance programs are effective tools that can reduce the serious consequences of corruption in large companies. Therefore, this study aimed to study the impact of the application of different corporate governance mechanisms and compliance programs on reducing corporate corruption. The study also included the advantages and disadvantages of each corporate governance mechanism according to the latest findings of experimental studies. The study also assessed the extent to which Egyptian companies comply with the Egyptian legislation and laws issued for corporate governance, and identified the best mechanisms that can be applied in Egyptian companies to govern those companies and implement compliance programs, and the impact of the application of good governance in reducing Egyptian corporate corruption, increasing employee and customer satisfaction, and reducing the depletion of company resources. In addition, the study addressed the main challenges facing Egyptian companies in implementing good corporate governance and compliance. The results of the study indicated that corporate governance mechanisms proposed by most international agencies and organizations concerned with combating corruption have an effective impact in reducing corruption in companies. However, to achieve the desired results from each good corporate governance mechanism, recent experimental studies have proposed some requirements or precautions that companies or governments can commit to to maximize the benefits of these mechanisms. On the other hand, the results of the study showed that Egyptian companies, both in the private and public sectors, have taken serious steps in implementing good corporate governance and implementing compliance programs. However, companies do not fully comply with the instructions of good corporate governance, and there are still some shortcomings in the implementation of good corporate governance and compliance programs. These shortcomings are due to several different reasons, which are mainly related to the non-mandatory nature of corporate governance in Egypt, in addition to the lack of sufficient incentives for companies to implement the proposed programs. Keywords: Governance mechanisms – compliance programs – corruption

Audit Quality and Earnings Management of Listed Manufacturing Firms in Nigeria

This study investigates whether there is any relationship between audit committee characteristics and financial restatement. Using secondary data over the period from 2009 to 2020 of 12 non- financial firms, the results of the Panel Estimated Generalized Least Squares (EGLS Period SUR) reveal that audit firm size, audit tenure, audit fees, audit firm age and joint audit are negatively and statistically significant with earnings management while audit independence has a positive and significant impact of earnings management. The overall results shows that audit quality significantly influenced earnings management and that help in reducing managers tendencies to reduce the practices of managing earnings for whatever the reasons. The study concludes with some recommendations for better performance reporting.

Audit consortium impact on audit quality assessment: evidence from Egypt

Purpose Audit consortium of joint and dual audits is one of the most controversial mechanisms aimed at improving audit quality and resolving several related debatable issues. This study aims to empirically investigate the impact of audit consortium on audit quality assessment in Egypt. It specifically examines whether audit opinion modification level is triggered by joint and dual audits existence and whether it is influenced by the relative importance of the auditor pair combination types. Design/methodology/approach A sample of companies listed on the Egyptian Stock Exchange constituting the EGX 30 index is examined over a period of five years, from 2016 to 2020. A quantitative research methodology is used, using content analysis of companies’ audit reports and carrying out longitudinal panel ordinary least squares multiple regression tests. Findings Results show that audit quality is significantly enhanced by conducting joint and dual audits of Egyptian companies’ financial statements. Findings indicate that both joint and dual audits significantly increase auditors’ propensity to modify audit opinions as compared to companies that engage in single audits. However, this increase in audit quality is not supported by the presence of Big 4 joint auditors or affiliated joint auditors, while the impact of Big 4 dual auditors cannot be confirmed. Nevertheless, such a potential increase in audit opinion modification is boosted by the presence of affiliated dual auditors, which appears to translate into higher quality. Research limitations/implications The study has important implications for researchers, corporates, those charged with governance, financial statement users, auditors, regulators and standard setters, who might be interested in whether an audit consortium and a particular auditor pair combination are associated with superior audit quality. It provides empirical evidence that might contribute to the continuous challenge of promoting the quality and effectiveness of the external audit. Originality/value This study adds to the relatively limited and challenging literature on the potential contribution of audit consortium, using audit opinion modification level as a direct assessment of audit quality. It extends the scope of prior research by examining the existence of joint and dual audits and the relative importance of joint and dual auditor pair combination types. The study provides key insights from a distinctive and complex emerging audit market.

EXTERNAL AUDIT ATTRIBUTES AND INCOME SMOOTHING OF LISTED BANKS IN NIGERIA

The present study seeks to examine the effect of external audit attributes on income smoothing-INSM in listed deposit money banks in Nigeria covering a study period of ten (10) years spanning from 2012 to 2021 over ten (10) banks. The regressed is income smoothing measured by loan loss provision while the regressor is external audit attributes measured by Audit Firm Size (AFS), Non-audit Service Fees (NASF), Audit Tenure (ATN), and Joint Audit (JOA). The study covered ten selected deposit money banks listed on the Nigerian Exchange Group (NEG) as at 31st December 2021 while data were collected from the annual reports of the selected banks. Further, the ex-post facto research design was used and emphases were laid on banks’ data. The study adopted panel data multiple regression estimation technique while data were analyzed through the Eviews-9 statistical package for data analysis. The study reported that, Audit Firm Size (AFS) exerted a negative significant effect on INSM of listed deposit money banks in Nigeria. Meanwhile, Non-audit Service Fees (NASF) and Audit Tenure (ATN) exerted a positive significant effect on INSM of listed deposit money banks in Nigeria. However, Joint Audit (JOA) exerted a negative yet minimal effect on ISMN of quoted banks in Nigeria in. Hence, the paper concludes that, external audit attributes have mixed effects on ISMN tendencies of bank managers in Nigeria. As such, bank owners must ensure that they engage the services of credible auditing firms with track records of delivering reports that show the actual situation of the bank. Meanwhile, the Financial Reporting Council (FRC) should have stiffer penalty for bank managers/auditing firms caught engaging in the act of ISMN.
 Keywords: External Audit Attributes, Audit Firm Size (AFS), Non-audit Service Fees (NASF), Audit Tenure (ATN), and Joint Audit (JOA), Income Smoothing.