Where more than one firm is appointed and are both responsible for the opinion
There are several advantages and disadvantages in a joint audit being performed
The subs auditor will have a good understanding of the business / controls etc so working together will help the principal auditor catch up quicker
This is a key issue, as the principal auditor needs a thorough understanding of the subsidiary also for risk assessment
A joint audit allows sufficient resources to be allocated to the subs audit, assuring the quality of the opinion given
Both auditors can discuss contentious issues together
Often a ‘fresh pair of eyes’ helps.
It should be easier to challenge management and therefore ensure that the auditors’ position is taken seriously
More expensive for the client
From a cost/benefit point of view there is clearly no point in paying twice for one opinion to be provided.
Despite the audit workload being shared, both firms will have a high cost for being involved in the audit in terms of senior manager and partner time
Different audit approaches
Problems could arise in deciding which firm’s method to use, for example, to calculate materiality, sample sizes etc
One firm’s methods may dominate, eliminating the benefit of a joint audit being conducted
There may be problems for the two audit firms to work together harmoniously
Both firms are jointly liable
They could, however, blame each other, making the litigation process more complex
However, it could be argued that joint liability is not necessarily a drawback, as the firms should both be covered by professional indemnity insurance.