What is a potential drawback of joint audits?

The potential drawback of joint audits primarily lies in the potentially increased fees for clients. Joint audits, which involve two audit firms working together on the same engagement, can lead to higher overall costs for clients because each firm will charge fees for their contributions to the audit process. The collaboration often requires more resources, as both firms need to allocate personnel, time, and tools to complete the audit effectively.

Clients may face these increased fees as a result of additional management and coordination required between the two firms, as well as the duplication of certain audit procedures to ensure both firms are in agreement. This complexity may not necessarily result in proportionate benefits, especially for smaller entities that may not gain significant insights or advantages from engaging two audit firms instead of one.

Other potential drawbacks, while relevant, do not directly relate to the financial impact on clients as significantly as the increased fees do in a joint audit scenario. For instance, while involvement of additional stakeholders could complicate communication and decision-making processes, it is the financial implications of joint audits that most directly concern clients.