Purpose The purpose of this paper is to examine the use of a dualauditjointaudit process and the level of compliance with IFRS in listed Kuwaiti financial institutions.Designmethodologyapproach An OLSregression model was used to test the relationship among dualauditjointaudit process and the level of compliance with IFRSdisclosure. The sample was based on 33 firm observations in 2006.Findings The main results reveal that financial institutions audited by dualauditors were more compliant with IFRSrequired disclosure than financial institutions audited by jointauditors.Research limitationsimplications The authors have assumed that the work done by both auditors is as per the Central Bank of Kuwait CBK circular which obligates both auditors to do their fieldwork independently and then consolidate their work before issuing the final audit report. In the authors opinion, it is less likely that both auditors will not comply with CBK regulation, especially because CBK has the right to ban a noncompliant audit firm from auditing banks. The authors did not ask audit firms whether they are complying with this circular because it was believed that audit firms would not disclose a noncompliance issue with regulators to outsiders.Practical implications This paper provides empirical evidence about the effectiveness of using dualauditors in promoting compliance with IFRSdisclosure.Originalityvalue To the authors knowledge, this is the first study to explore the association between the levels of compliance with IFRSdisclosure and the dualjoint audit process in the financial institutions listed on the Kuwait Stock Exchange.
Journal of Economic and Administrative Sciences – Emerald Publishing
Published: Feb 1, 2012