What do we know about empirical joint audit research? A literature review

  • Received March 11, 2017;
    Accepted April 11, 2017;
    Published April 19, 2017
  • Author(s)
    Patrick Velte
    ORCID Researcher ID
  • DOI
    http://dx.doi.org/10.21511/afc.01(1).2017.01
  • Article Info
    Volume 1 2017, Issue #1, pp. 4-14
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This literature review evaluates empirical studies which concentrate on economic effects on joint audits from an international perspective. We briefly introduce the theoretical and empirical joint audit framework that comprises an adequate structure of the state-of-the-art of empirical research in this field. This is followed by a discussion of the following output factors of joint audits: (1) audit quality; (2) audit costs and (3) audit market concentration. We will summarize the key findings in each area, and provide a description of the analyzed proxies. Finally, we will discuss the current limitations of the studies and give useful recommendations for future empirical research activities in this topic.

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    • Fig. 1. Joint audit research framework
    • Table 1. Count of published papers cited
    • Table 2. Empirical joint audit studies
    • Alfraih, M.A. (2016). Corporate governance mechanisms and audit delay in a joint audit regulation. Journal of Financial Regulation and Compliance, Vol. 24 (online first).
    • André, P., Broye, G., Pong, C. and Schatt, A. (2016). Are Joint Audits Associated with Higher Audit Fees? European Accounting Review, Vol. 25, pp. 245-274.
    • Antle, R. (1982). The Auditor as an Economic Agent. Journal of Accounting Research, Vol. 20, pp. 503-527.
    • Audousset-Coulier, S. (2015). Audit Fees in a Joint Audit Setting. European Accounting Review, Vol. 24, pp. 347-377.
    • Baldauf, J. and Steckel, R. (2012). Joint Audit and Accuracy of the Auditor’s Report. An empirical study. International Journal of Economic Sciences and Applied Research, Vol. 5, pp. 7-42.
    • Ballas, A.A. and Fafaliou, I. (2008). Market shares and concentration in the EU auditing industry. International Advances in Economic Research, Vol. 14, pp. 485-497.
    • Bédard, J., Piot, C. and Schatt, A. (2016). An evaluation of the French expertise with joint auditing. Working paper.
    • Bennouri, M., Nekhili, M. and Touron, P. (2015). Does auditors' reputation “discourage” related-party transactions? The French case. Auditing, Vol. 34, pp. 1-32.
    • Bisogno, M. and De Luca, R. (2016). Voluntary Joint Audit and Earnings Quality. Evidence from Italian SMEs. International Journal of Business Research and Development, Vol. 5, pp. 1-22.
    • Broye, G. (2007). Concentration du marché de l'audit. Un état des lieux. Revue Francaise de Comptabilité, Vol. 399, pp. 34-47.
    • Chow, C. (1982). The demand for external auditing. The Accounting Review, Vol. 57, pp. 272-291.
    • DeAngelo, L.E. (1981a). Auditor Independence, „Low Balling“ and Disclosure Regulation. Journal of Accounting and Economics, Vol. 3, pp. 113-127.
    • DeAngelo, L.E. (1981b). Size and Audit quality. Journal of Accounting and Economics, Vol. 3, pp. 183-199.
    • Dechow, P.M., and Dichev, I.D. (2002). The quality of accruals and earnings: the role of accrual estimation errors. The Accounting Review, Supplement, Vol. 77, pp. 35-59.
    • Dechow, P.M., Ge, W., and Schrand, C. (2010). Understanding earnings quality: A review of the proxoxies, their determinants and their consequences. Journal of Accounting and Economics, Vol. 50, pp. 344-401.
    • Dechow, P.M., Richardson, S., and Tuna, I. (2003). Why are earnings kinky? An examination of the earnings management explanation. Review of Accounting Studies, Vol. 8, pp. 355-384.
    • Dechow, P.M., Sloan, R.G., and Sweeney, A.P. (1995). Detecting earnings management. The Accounting Review, Vol. 70, pp. 193-225.
    • DeFond, M., and Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, Vol. 58, pp. 275-326.
    • Deng, M., Lu, T., Simunic, D. and Ye, M. (2014). Do Joint Audits Improve or Impair Audit Quality? Journal of Accounting Research, Vol. 52, pp. 1029-1060.
    • El Assy, M.G. (2015). The Effect of Joint Audit on Audit Quality. Empirical Evidence from Companies Listed on the Egyptian Stock Exchange. International Journal of Accounting and Financial Reporting, Vol. 5, pp. 195-207.
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    Acknowledgment
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Accounting and Financial Control