This paper investigates the audit team outcomes of team diversity. Diversity theory suggests that diversity can benefit a team's work quality if the variety of team characteristics improves decision-making and performance. However, team diversity can have harmful affective outcomes if team members separate into different categories, and thus they feel stressed, intend to leave the profession or experience conflict between team members. We investigated this paradox in team diversity in an audit context at a Big 4 audit firm in Sweden, which provided proprietary team data. In addition, 335 individuals from 185 different audit teams responded to a questionnaire. Each participant responded to a survey about their experience with one specific engagement. Results indicated that team diversity benefits the audit team's affective outcomes of role stress, satisfaction and turnover intentions. However, diverse teams also reduce some audit teams' work quality outcomes, such as dysfunctional behaviour, performance, effort and perceptions of audit quality.