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Does the provision of non-audit services pose a threat to the independence of auditors in Sweden?: Evidence from public firms in Sweden
2019 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Background: The auditor should ensure the quality of the financial reports

and a fair view of the company’s financial condition to all shareholders and stakeholders

of the company, the auditor independence is fundamental for the audit quality. The audit

independence has received increased attention since the financial global crisis and the

discussion often takes upon whether the audit independence is compromised or not,

when audit firms provide both audit services and non-ˇaudit services to the same client.

Purpose: The purpose of this study is to find evidence for whether or

not the provision of non-ˇaudit services poses a threat to the independence of auditors in

Sweden. The study aims to fill the existing gap in prior literature since few studies have

been conducted on the Swedish audit market. The studies that have been conducted,

have been focusing on listed companies on small and mid-ˇcap, therefore our study

includes large cap to extend the literature.

Method: The sample used in this study consists of companies listed

on the Stockholm NASDAQ OMX including small-ˇ, mid-ˇ and large cap with the time

period of 2012-ˇ2017. Data is collected from the company’s annual reports and is

obtained from Business Retriever, Amadeus, DataStream or manually collected.

Regression analyses are conducted to test three hypothesizes.

Conclusion: The study finds evidence for a positive relationship between

audit fees and non-ˇaudit fees which do not imply a threat to auditor independence.

Furthermore, a positive relationship is found between the level of non-ˇaudit services

provided and the length of auditor tenure, which indicates a threat to the independence

of auditors. A positive relationship between timely loss recognition in accruals and

abnormal non-ˇaudit fees is found which indicates a possible threat to the independence

of auditors. Our study contributes to a societal level as a potential problem of audit

independence needs to be brought into the light. Overall this study finds divided results

of if the provision of non-ˇaudit services poses a threat to the independence of auditors

in Sweden.

Place, publisher, year, edition, pages
2019. , p. 44
Keywords [en]
auditor independence, non-­audit services, non-­audit fees, audit services, audit fees, audit quality, audit tenure, abnormal non-­audit fees, accruals and timely loss recognition.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-43884ISRN: JU-IHH-FÖA-2-20190830OAI: oai:DiVA.org:hj-43884DiVA, id: diva2:1319308
Subject / course
JIBS, Business Administration
Supervisors
Examiners
Available from: 2019-06-20 Created: 2019-05-30 Last updated: 2019-06-20Bibliographically approved

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CiteExportLink to record
Permanent link

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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
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf