Abstract:
Research Purpose : The area of joint audits became increasingly popular after the global financial crisis in 2010. This was after the European Commission proposed to mandate joint audits. South Africa is one of a few countries in the world were joint audits were once mandated for financial services firms. Although empirical research has increased, little has been done on theoretical research. This research investigates the factors influencing on the success of joint audits using an interorganisational theory, the resource dependence theory and concepts from joint audit literature research.
Research Methodology : The study adopted a quantitative descriptive approach. A self-administered online questionnaire was sent to a group of individuals with experience on joint audits. The questionnaire was based on interorganisational literature and research already conducted on joint audits. The group of individuals included individuals from companies that have been audited, individuals who have formed part of joint audits and regulators.
Research Findings : The results of the research established important factors influencing joint audits. A suggested model which can be used by joint auditors, audited companies and regulators was developed from these findings. Opinion shopping ranked highest as the most important factor influencing joint audits, followed by similarity and goals where it was found that joint audits work best when firms are of a similar size, each firm has a unique value proposition and goals are clear. Market uncertainty was the next most influencing factor followed by the level of difficulty of the audit and lastly freeriding. Results suggested that gender does not to have any influence on the success of joint audits.
