Is Joint Audit Bad or Good? Efficiency Perspective Evidence from Three European Countries

Lesage, Cédric

doi:10.2139/ssrn.1982732

Cited by 10 publications

(15 citation statements)

References 42 publications

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“…A popular claim against joint audits expressed in official statements on the Green Paper is that joint audits lead to a significant increase in audit fees. Most of the empirical studies analyzing joint audits in countries with a joint audit regulation (France, Denmark) or analyzing voluntary joint audits confirm that joint audits are related to higher audit fees (Holm & Thinggaard, ; André et al , ; Lesage, Ratzinger‐Sakel & Kettunen, , ; Zerni et al , ). However, an increase in audit fees is subsidiary if joint audits result in higher (perception of) audit quality.…”

Section: Resultsmentioning

confidence: 99%

Auditor Tenure and Perceived Earnings Quality

Hohenfels

2016

Int J Auditing

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The study examines how auditor tenure affects investors' perception of audit quality. It is motivated by the ongoing debate on the effect of auditor tenure on audit quality and the recent regulation approval on mandatory auditor rotation at the EU level, which is justified by the concern that longer auditor tenure impairs auditor independence and thus lowers audit quality. Perceived earnings quality, as measured by the earnings response coefficient from returns‐earnings regression, is used as a proxy for investors’ perception of audit quality. Using a sample of 2,320 firm‐year observations from German listed firms between 2006 and 2013, the study provides evidence of a non‐linear relationship between auditor tenure and perceived earnings quality. The results suggest that investors perceive lower earnings quality during the early and later years of an auditor–client relationship. This perception does not change during the investigation period. Furthermore, the results show that earnings quality is perceived as highest when auditor tenure is 8–9 years.

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Section: Resultsmentioning

confidence: 99%

Auditor Tenure and Perceived Earnings Quality

Hohenfels

2016

Int J Auditing

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“…When viewed as a whole, the empirical evidence suggests that audit fees are higher for joint audits compared to single audits, although the effect on audit quality is mixed and remains unclear (Lesage et al. ; Zerni et al. ; André et al.…”

Section: Related Researchmentioning

confidence: 99%

“…Several recent studies empirically compare audit quality and audit fees between joint audits and single audits. When viewed as a whole, the empirical evidence suggests that audit fees are higher for joint audits compared to single audits, although the effect on audit quality is mixed and remains unclear (Lesage et al 2011;Zerni et al 2012;Andr e et al 2016). None of these studies considers the effect of auditor pairs, which is critical because, theoretically, different auditor pairs could have different audit quality.…”

Section: Related Researchmentioning

confidence: 99%

“…Several empirical studies try to compare audit quality and audit fees under joint audits and single audits either in a voluntary joint audit setting or in a cross‐country setting with one mandatory joint audit country and one mandatory single audit country. The results of these studies are mixed (Lesage, Ratzinger‐Sakel, and Kettunen ; Zerni et al. ; André, Broye, Pong, and Schatt ).…”

Section: Introductionmentioning

confidence: 99%

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The Effect of Joint Auditor Pair Composition on Audit Quality: Evidence from Impairment Tests

Lobo

Paugam

Zhang

et al. 2016

Contemporary Accting Res

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Using a sample of firms from France, where the law requires the use of two auditors, we study the effect of auditor pair composition on audit quality by examining a specific account, goodwill impairment. We document that firms audited by a Big 4-non-Big 4 auditor pair (BS) are more likely to book an impairment and book a larger impairment than firms audited by a Big 4-Big 4 auditor pair (BB) when low-performance indicators suggest a greater likelihood of impairment. Moreover, firms audited by a BB pair reduce impairment disclosures when they book impairments, while firms audited by a BS pair do not, suggesting lower transparency for firms audited by a BB pair. Our results inform investors and firms in mandatory joint audit regimes, as well as regulators who are considering requiring joint audits.Incidence de la composition du coll ege d'auditeurs sur la qualit e de l'audit conjoint : le cas des tests de d epr eciation R ESUM ELes auteurs etudient l'incidence de la composition du coll ege d'auditeurs sur la qualit e de l'audit conjoint en s'int eressant plus particuli erement aux tests de d epr eciation de l' ecart d'acquisition. L' etude est men ee sur un echantillon de soci et es franc ßaises pour lesquelles la r eglementation impose un audit conjoint.

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“…Incentives Er is slechts beperkt onderzoek op het gebied van de joint audit, het verrichten van de accountantscontrole door meer dan één accountantskantoor (in de praktijk hoopt Barnier op combinaties van Big 4-en non-Big 4-kantoren). Beschikbare resultaten suggereren geen stabiele relatie tussen joint audit en de kosten van accountantscontrole of kwaliteit van de accountantscontrole (Lesage et al, 2011). In een concurrerende setting kunnen extra prikkels ontstaan om elkaar ook op een gezamenlijke controleopdracht te beconcurreren.…”

Section: De Joint Auditunclassified

‘Barnier’ en de professioneelkritische instelling van de accountant

Amerongen¹,

Quadackers

2012

MAB

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SAMENVATTING Barnier presenteert maatregelen die met name op de accountantsorganisatie als geheel zijn gericht, maar die uiteraard een impact hebben op de oordeelsvorming en het gedrag van individuele accountants. Echter, voor de professioneel-kritische instelling van de individuele accountant leiden de maatregelen van Barnier mogelijk niet altijd tot een optimale situatie. Op basis van het professional skepticism model van Nelson (2009) concluderen wij dat de maatregelen van Barnier vooral zijn gericht op het wegnemen van verkeerde prikkels (incentives) bij accountants. Barnier geeft echter onvoldoende expliciete aanknopingspunten met betrekking tot karaktertrekken, kennis, ervaring en training van de accountant.RELEVANTIE VOOR DE PRAKTIJK Het onderwerp professioneel-kritische instelling is van wezenlijk belang voor het adequaat functioneren van het accountantsberoep. Dit artikel draagt bij aan de uitwerking van het begrip professioneel-kritische instelling vanuit de maatregelen van Barnier en geeft daarmee handvatten voor de toepassing ervan voor individuele accountants en accountantsorganisaties.

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Is Joint Audit Bad or Good? Efficiency Perspective Evidence from Three European Countries

Cited by 10 publications

References 42 publications

Auditor Tenure and Perceived Earnings Quality

Auditor Tenure and Perceived Earnings Quality

The Effect of Joint Auditor Pair Composition on Audit Quality: Evidence from Impairment Tests

‘Barnier’ en de professioneelkritische instelling van de accountant

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