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Non-audit Services and Auditor Independence in Sweden: Evidence from Public Swedish Companies
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
2017 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Background Large-scale accounting scandals of the early 21st century brought about a series of regulatory changes that affected the auditing profession. The provision of non-audit services by auditors, which has grown at a rapid pace during the last few decades, has raised questions about the auditor’s ability to maintain independent.

 

PurposeThe purpose of this study is to examine if the provision of non-audit services poses a threat to the auditor’s independence, with focus on public Swedish firms. Since there is a limited number of studies in the Swedish literature on the subject, this study aims at filling some of the gaps in the academic field.

 

MethodData about audit fees and non-audit fees, auditor tenure and modified/going concern opinions has been collected from the companies’ annual reports, which can be obtained from the database Business Retriever or directly from the companies’ websites. Three hypotheses are developed to test the following relationships; audit fees and non-audit fees (1), audit opinions and non-audit services (2) and auditor tenure and non-audit services (3). The findings from the different tests are subsequently analyzed with respect to theory in order to answer the research questions of this study. The sample consists of small-, mid- and large cap-companies listed on the Stockholm stock exchange in the period from 2012 to 2015.

 

Conclusion The results show a positive relationship between audit fees and non-audit fees, but do not suggest a loss of independence. There is no relationship between the amount of non-audit fees and the auditor’s propensity to issue a modified/going concern opinions. Furthermore, no association between the amount of non-audit services and the length of the auditor tenure is found. Overall, this study fails to provide evidence for the claim that independence of mind is compromised in the presence of non-audit services.

Place, publisher, year, edition, pages
2017. , 63 p.
Keyword [en]
Non-audit services, Auditor independence, Audit fees, Auditor tenure, Knowledge spillovers, Audit opinions
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-36194ISRN: JU-IHH-FÖA-2-20170471OAI: oai:DiVA.org:hj-36194DiVA: diva2:1113504
Subject / course
IHH, Business Administration
Presentation
2017-05-30, Internationella Handelshögskolan i Jönköping, Gjuterigatan 5, Jönköping, 15:00 (English)
Supervisors
Examiners
Available from: 2017-06-27 Created: 2017-06-21 Last updated: 2017-06-27Bibliographically approved

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CiteExportLink to record
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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
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  • Other locale
More languages
Output format
  • html
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