The Benefits of Joint Audit
Implemented correctly, Joint Audit offers clear and demonstrable benefits in terms of macro economic policy, independence and objectivity, quality, and technical knowledge.
• The only proven mechanism enabling new entrants into the audit market for large multinational companies.
• Stimulates competition between a greater number of audit firms from different cultural backgrounds, resulting in more innovation and better response to market needs.
• Enables the smaller firms to get on a ladder of investments, be it in terms of geographic coverage, sector expertise or size.
• Mitigates the risk of the Big 4 becoming the Big 3 which would result in certain regulatory capture.
• Reinforces auditor independence, in particular over proper acceptance of non-audit services.
• Reduces the risk of over-familiarity through rotating the allocation of fieldwork between the joint auditors after a set number of years.
• Reinforces the auditors’ ability to stand their ground in the event of a disagreement with the company.
• Encourages healthy dialogue between the two audit firms appointed which brings a critical eye on the respective work of each auditor.
• Reinforces audit quality via the “four eyes” principle by creating timely and in-built independent quality control.
• Stimulates innovation and awareness (“critical eye”) through rotating fieldwork after a set number of years.
• Enables a smooth and sequenced rotation of audit firms which minimises disruption to the client by harmoniously transferring knowledge and understanding of the company’s operations and culture.
• Offers the audited group a broader spectrum of skills and geographic coverage to work / choose from.
• Enables comparison of service levels between the firms which drives service quality up.
• Is fully compliant with International Auditing Standards, in particular ISA 600.
• Enables companies to benefit from the technical expertise of more than one audit firm and to have a richer discussion on complex technical issues.
• Increases the technical knowledge base by encouraging a more diverse audit market.
• Offers additional scope for benchmarking best practice across the market.