The Impact of the Joint Audit on Audit Costs and Quality

A Field Analysis in the Saudi Business Environment

Abstract

The objective of this study is to obtain a practical evidence from the Saudi business environment for the impact of joint audit on the costs and quality of auditing. The results of the study found many positive benefits for adopting joint audit in business firms within the Saudi business environment, the results also showed that adopting joint audit has a positive and significant effect on increasing the costs of performing audit tasks, and that there is also a positive and significant impact for adopting joint audit on supporting and improving the quality of auditing. Based on these results, the study recommends the need for expanding the application of joint audit due to its increasing benefits to all stakeholders and more specifically for its positive impact on increasing the confidence in financial reports compared to those reports that are audited by a single auditor. This would also help in the restoration of confidence in the audit profession, and will be positively reflected on share prices, investors' decisions, and firms’ value which will help in more economic development, despite the high costs of the audit work. It is also necessary for relevant authorities and regulators in Saudi Arabia to work on issuing a standard for joint auditing, concerned with setting the conceptual framework for joint auditing and how to perform this audit it. This standard should also include the principles, procedures and mechanisms that auditors must adhere to when performing joint audits in order to enhance the efficiency and effectiveness of the audit process, which would increases the overall quality of external auditing.