Challenges in Global Group Audits: Evidence from Component Audit Leaders

Regulators and standard setters have expressed concerns about global group audit (GGA) quality, as deficiencies in group audits account for a significant proportion of all audit deficiencies worldwide. To explore how both the group and component auditor processes and behaviors impact the quality of component audits, we conduct an experiential questionnaire with 86 experienced component audit (CA) leaders. The qualitative responses confirm regulators’ concerns about insufficient involvement of group auditors in the component audit. Specifically, CA leaders experience a lack of group auditor involvement in the staffing, planning, and fieldwork phases of the component audit, as well as insufficient review of component auditor work. Regulatory and cultural barriers, along with insufficient fees, pose further challenges for CA teams. However, CA leaders also report positive experiences, perceived to improve audit quality, when group auditors work collaboratively with CA team during planning and fieldwork.