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CPA-AGRC Seminar Series

Wednesday, January 31, 2018, 10:00 a.m. to 11:30 a.m.

Why are joint audits imbalanced?

Sophie Audousset-Coulier

Associate Professor, Accountancy

Concordia University, Montreal

Abstract

The question of the benefits of joint audit on audit quality and audit market competition is subject of heated debates among standard setters (European Commission 2010) and professional bodies (Ratzinger-Sakel et al. 2012). To achieve the goal of maintaining the highest audit quality standards, joint audits arrangements should enable the effective involvement of the two independent auditors (Bennecib 2004; Deng et al. 2014). This raises questions about how auditors share the audit work and about the necessity to regulate the balance of power between joint auditors. We use the French joint audit setting to study the determinants of imbalanced joint audits. We find audit complexity (foreign operations) to be a key driver of joint audit imbalances, specifically in the presence of a mixed joint audit college (i.e., a Big 4 paired with a non-Big 4). We also find a significant decrease in joint audits imbalances before and after the French auditing standard requiring a balanced repartition of the audit work (NEP 100.07). Finally, we observe that the frequency of collaborations between the two co-auditors is positively associated with the joint audit imbalance. This effect is stronger for mixed joint audits, and can thus be interpreted as a ‘dominance’ effect exerted by Big 4 auditors on smaller ones. This study is among the first to enlighten the role played by supply-side effects (differences in auditors’ production functions) in the (presumed) effectiveness of joint audits.


Date:
Wednesday, January 31, 2018
Time:
10:00 a.m. to 11:30 a.m.
Location:
Telfer School of Management
Desmarais Building
DMS 4165
55 Laurier Avenue East
Ottawa, Ontario K1N 6N5
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About the Speaker

Dr. Audousset-Coulier joined JMSB in 2007 and received her Ph.D. from HEC Paris in 2008. Prior to her doctoral studies, Dr. Audousset-Coulier has worked at KPMG (audit and business advisory) and at BNP-PARIBAS (financial reporting, consolidation). Her research primarily focuses on the auditing stream of the accounting research field in various institutional contexts (Canada, European Union, France, U.S., and Vietnam). In line with her dissertation work, she has developed an expertise in the field of joint-auditing which is a specific feature of the French auditing context. This regulatory context has received a lot of attention from regulators in the European Union as one possible way to increase the independence of the auditors and the audit quality, and to reduce the concentration of the audit market. Her dissertation work about audit fees in the context of joint audit and has been published in the European Accounting Review. She also has two other publications in that area:  one paper published in Accounting in Europe and a research monograph published by the Research Center of the Institute of Chartered Accountant of Scotland (ICAS). She also has other research projects and papers in the field of auditing (audit market, audit fees, audit quality) including a publication in Auditing: A Journal of practice and theory about the industry specialization of auditors.

Furthermore, Dr. Audousset-Coulier is also conducting research projects focusing on the practices of accounting or finance professionals and on corporate governance practices. One study about the investment practices of Canadian pension funds is published in the Journal of Business Ethics.

Dr. Audousset-Coulier teaches advanced Auditing and advanced Financial Accounting courses at the undergraduate level and is involved in the Ph.D. program (teaching of Audit Research courses and member of Ph.D. Committees).

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