The effect of joint audit on accounting conservatism Empirical evidence from Egypt | ||
| مجلة البØوث التجارية | ||
| Articles in Press, Accepted Manuscript, Available Online from 23 September 2025 | ||
| Document Type: تجاریة کل ما یتعلق بالعلوم التجاریة | ||
| DOI: 10.21608/zcom.2025.420901.1494 | ||
| Authors | ||
| بسمه عصام كامل أبوزيد* 1; Ù…Øمد Ù…Øمد سليمان2 | ||
| 1قسم المØاسبة كلية التجارة جامعة الزقازيق | ||
| 2كليه التجره جامعه الزقازيق | ||
| Abstract | ||
| This study investigates the impact of joint audits on accounting conservatism among non-financial firms listed on the Egyptian Stock Exchange. Using balanced panel data from 93 companies over the 2015–2021 period (651 firm-year observations), the research applies the Khan and Watts (2009) model to measure conservatism. Employing dynamic panel data and fixed effects models, the study finds no statistically or practically significant effect of joint audits on firms’ accounting conservatism, even after adjusting for dynamic biases. This outcome supports the hypothesis that joint audits, as currently implemented in Egypt, lack the regulatory strength and auditor coordination necessary to influence conservative financial reporting. The findings suggest that joint audits are largely formalistic, with limited integration between auditors and insufficient regulatory oversight, thereby failing to shape firms’ accounting policies meaningfully. In contrast, prior-period conservatism shows a strong, positive influence on current conservatism levels, indicating that conservative reporting is a persistent behavior. This continuity may stem from managerial preferences, internal accounting culture, or established control systems aimed at ensuring financial reliability and minimizing earnings volatility. Cohen’s effect size analysis further confirms the lack of practical impact from joint audits, prompting a call for deeper research into the institutional and regulatory barriers that hinder their effectiveness. Future studies should explore auditor relationships, coordination mechanisms, corporate governance, and regulatory frameworks to better understand how joint audits might be restructured to enhance accounting conservatism. | ||
| Keywords | ||
| external audit; Joint audit; accounting conservatism | ||
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