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Can Shared Auditors Enhance Audit Quality through Banking Relationships?
Professional rules restrict auditors from sharing information between clients, but this study investigates whether information transfers between related audits can enhance audit quality. It examines if auditors who audit both the lender and the borrower in a banking relationship can use knowledge transfer to improve the lender’s loan-loss provisioning accuracy and decrease the likelihood of the borrower receiving unjustified clean audit opinions before bankruptcy.
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