Joint Audit – A Means to Reduce Bias and Enhance Scepticism in Financial Statement Audits?

This paper proposes a contribution of joint audit to audit quality through the mitigation of cognitive bias during the audit process, a potential largely overlooked in the prior literature. With reference to social and psychological factors impacting the quality of auditor hypothesis formation and the search for corroborating evidence, we contend that cognitive bias particularly affects the application and maintenance of an appropriate level of professional scepticism. Building on the extant literature on bias and heuristics in single audit arrangements, the paper suggests that the impact of these factors on audit quality may be less pronounced under some joint audit arrangements than for a single engagement team. Mitigating bias, in turn, could enable a more consistent application of an appropriate level of professional scepticism, an attitude of critical importance to audit quality. We review and evaluate theoretical frameworks derived from extant research to guide future applied studies and extend the discussion on bias and professional scepticism in audit, presenting a novel and previously ignored role for joint audit arrangements