Target firms in Australian takeovers are required to obtain an independent assessment of the offer price in situations where the Corporations Law considers the bidder has a superior bargaining position. The intention of this requirement is to protect target shareholders from being offered a lower takeover premium. The only empirical study of expert reports, Eddey (1993), is consistent with expert reports achieving their purpose, as the results indicate no difference in target firm premiums in offers with and without an expert report. Eddey also reports that a revision in offer price is more likely where an expert indicates the bid is �not fair and reasonable.� Using all takeovers from 1990 to 2000, this thesis aims to re-examine and substantially extend the findings in Eddey. As the sample includes all bids, irrespective of the form of payment consideration, the thesis will assess whether the results in Eddey can be extrapolated from cash-based bids to all takeover bids. In addition, the analysis will extend Eddey�s results by investigating whether expert reports result in a higher probability of a revision in offer price relative to takeovers without an expert report. This study also investigates the impact of the expert report on bidder announcement abnormal returns and examines the returns to both bidders and targets when the expert report is released. This will add to the limited current knowledge on the impact of expert reports on the capital market. This thesis also tests the validity of public criticisms of expert independence. Firstly, experts have been publicly criticised on the basis that they are not independent from the target firm. It has been suggested that such experts will be more likely to provide an opinion that agrees with the recommendation of target directors. Secondly, it has been alleged that experts who are also the target auditor provide their reports at a lower fee by cross-subsidising the reports� preparation from other fees received from the client. The concern with this practice is that these reports may be of lower quality. This criticism is tested by developing an expert fee model. This fee model is then used to assess whether, similar to evidence in the auditing field, �quality� experts earn a fee premium. The results indicate that the need for an expert report does not affect bidder abnormal returns at either the announcement of the takeover or release of the expert report. On the other hand, target shareholders earn significantly lower abnormal returns at the announcement of a bid where an expert report is required. This result is inconsistent with Eddey (1993) and raises doubt over whether experts prevent bidders from using their superior bargaining position to offer target shareholders a lower premium. Consistent with Eddey, the probability of an alteration in offer price is greater where an adverse expert opinion is given. The results also show that the presence of an expert increases the likelihood of a bid revision relative to takeovers in general. Target abnormal returns on the release of an expert report are positive and significant, irrespective of the type of expert opinion. This result however, is sensitive to any association between the author of the report and the target. In the case that an expert discloses any prior or current business dealings with the target, abnormal returns are insignificant. The conclusion from this finding is that the market perceives expert reports prepared by an associate of the target as lacking credibility. In light of this lack of information content it is recommended corporate regulators review those experts permitted to prepare reports. Contrary to the published criticisms, experts who have business dealings with the target are just as likely as other experts to provide an opinion that agrees with the recommendation of directors. The tests of a fee reduction by experts associated to the target indicate significant lower fees where the expert is the target auditor. Further analysis shows this result is only significant where the auditor is also a non-Big 6/5 firm. These auditors are also found to provide reports that are significantly shorter than other experts, suggesting the cut in fee is achieved by reducing the amount of effort. The results also find that the top two experts, Grant Samuels and Associates and Price Waterhouse Coopers, earn a fee premium over other experts. The finding of a fee premium for a large accounting firm indicates that such firms may receive a premium for both auditing and non-audit services.

Target firms in Australian takeovers are required to obtain an independent assessment of the offer price in situations where the Corporations Law considers the bidder has a superior bargaining position. The intention of this requirement is to protect target shareholders from being offered a lower takeover premium. The only empirical study of expert reports, Eddey (1993), is consistent with expert reports achieving their purpose, as the results indicate no difference in target firm premiums in offers with and without an expert report. Eddey also reports that a revision in offer price is more likely where an expert indicates the bid is �not fair and reasonable.� Using all takeovers from 1990 to 2000, this thesis aims to re-examine and substantially extend the findings in Eddey. As the sample includes all bids, irrespective of the form of payment consideration, the thesis will assess whether the results in Eddey can be extrapolated from cash-based bids to all takeover bids. In addition, the analysis will extend Eddey�s results by investigating whether expert reports result in a higher probability of a revision in offer price relative to takeovers without an expert report. This study also investigates the impact of the expert report on bidder announcement abnormal returns and examines the returns to both bidders and targets when the expert report is released. This will add to the limited current knowledge on the impact of expert reports on the capital market. This thesis also tests the validity of public criticisms of expert independence. Firstly, experts have been publicly criticised on the basis that they are not independent from the target firm. It has been suggested that such experts will be more likely to provide an opinion that agrees with the recommendation of target directors. Secondly, it has been alleged that experts who are also the target auditor provide their reports at a lower fee by cross-subsidising the reports� preparation from other fees received from the client. The concern with this practice is that these reports may be of lower quality. This criticism is tested by developing an expert fee model. This fee model is then used to assess whether, similar to evidence in the auditing field, �quality� experts earn a fee premium. The results indicate that the need for an expert report does not affect bidder abnormal returns at either the announcement of the takeover or release of the expert report. On the other hand, target shareholders earn significantly lower abnormal returns at the announcement of a bid where an expert report is required. This result is inconsistent with Eddey (1993) and raises doubt over whether experts prevent bidders from using their superior bargaining position to offer target shareholders a lower premium. Consistent with Eddey, the probability of an alteration in offer price is greater where an adverse expert opinion is given. The results also show that the presence of an expert increases the likelihood of a bid revision relative to takeovers in general. Target abnormal returns on the release of an expert report are positive and significant, irrespective of the type of expert opinion. This result however, is sensitive to any association between the author of the report and the target. In the case that an expert discloses any prior or current business dealings with the target, abnormal returns are insignificant. The conclusion from this finding is that the market perceives expert reports prepared by an associate of the target as lacking credibility. In light of this lack of information content it is recommended corporate regulators review those experts permitted to prepare reports. Contrary to the published criticisms, experts who have business dealings with the target are just as likely as other experts to provide an opinion that agrees with the recommendation of directors. The tests of a fee reduction by experts associated to the target indicate significant lower fees where the expert is the target auditor. Further analysis shows this result is only significant where the auditor is also a non-Big 6/5 firm. These auditors are also found to provide reports that are significantly shorter than other experts, suggesting the cut in fee is achieved by reducing the amount of effort. The results also find that the top two experts, Grant Samuels and Associates and Price Waterhouse Coopers, earn a fee premium over other experts. The finding of a fee premium for a large accounting firm indicates that such firms may receive a premium for both auditing and non-audit services.

This study provides evidence between auditors' fees and earnings management in New Zealand. The fee measures used in this study are audit fees, non-audit fees and total fees paid by a client to the audit firm. For each of the three fee measures, I derive client importance fee measures that reflect a client’s economic importance to the auditor relative to other clients of the auditor at the city office and national levels. This study employs both performance adjusted discretionary accruals and current accruals as proxies for earnings management. Using a sample of 224 firm-years comprising firms listed on the New Zealand Stock Exchange (NZX) in fiscal years 2004 and 2005, the results of multivariate tests indicate an adverse association between non-audit fees and earnings management. In other words, non-audit fees paid by a client relative to fees paid by other clients, at the office and national levels, appear to impair the auditor’s independence because clients generating relatively more non-audit fees report greater discretionary and current accruals. Such evidence is more pronounced for income increasing accrual proxies for earnings management. The results also show that audit fee is not related to earnings management. As the results in this study are consistent across both discretionary and current accruals, the validity of the results is strengthened. This study contributes to the literature by providing insight into how auditors’ fee metrics indicating client importance affect earnings management in a legal and institutional environment of a small economy, and where the audit market is largely saturated with little room for growth. This study raises implications for relevant regulatory bodies in New Zealand pertaining to future developments of auditor independence and financial reporting regulations.

This study provides evidence between auditors' fees and earnings management in New Zealand. The fee measures used in this study are audit fees, non-audit fees and total fees paid by a client to the audit firm. For each of the three fee measures, I derive client importance fee measures that reflect a client’s economic importance to the auditor relative to other clients of the auditor at the city office and national levels. This study employs both performance adjusted discretionary accruals and current accruals as proxies for earnings management. Using a sample of 224 firm-years comprising firms listed on the New Zealand Stock Exchange (NZX) in fiscal years 2004 and 2005, the results of multivariate tests indicate an adverse association between non-audit fees and earnings management. In other words, non-audit fees paid by a client relative to fees paid by other clients, at the office and national levels, appear to impair the auditor’s independence because clients generating relatively more non-audit fees report greater discretionary and current accruals. Such evidence is more pronounced for income increasing accrual proxies for earnings management. The results also show that audit fee is not related to earnings management. As the results in this study are consistent across both discretionary and current accruals, the validity of the results is strengthened. This study contributes to the literature by providing insight into how auditors’ fee metrics indicating client importance affect earnings management in a legal and institutional environment of a small economy, and where the audit market is largely saturated with little room for growth. This study raises implications for relevant regulatory bodies in New Zealand pertaining to future developments of auditor independence and financial reporting regulations.

This study investigated the relationship between audit independence and audit quality, which is measured by sanctions issued by Nasdaq Stockholm Exchange. Sanctions as a tool to measure audit quality is uncommon, this study is one of the first studies using this approach in Europe. The investigation was based on a sample size of 49 company-years, and a total of 16 unique companies that are or were listed on either Nasdaq Stockholm or Nasdaq First North between the years of 2008-2018. The study used a logistic regression model to investigate the relationship between the dependent and independent variables since the dependent variable was classified as a binary variable. Three different proxy variables were used to measure audit independence, Audit Tenure, Client Importance and Non-Audit Services. The study found indications about a negative relationship with each proxy variable, however the findings were not strong enough to be statistically significant, which led to the conclusion that this study did not find any association between sanctions and the chosen variables.

Revisionsplikten i Sverige avskaffades för några år sedan för de minsta aktiebolagen och idag är det ett omdiskuterat ämne. Det är dock först nu som effekterna börjar visa sig. Idag är det cirka 80 procent av de minsta bolagen som inte anlitar en revisor. Studien har utförts ur företagens perspektiv och syftet med vår studie har varit att undersöka om bolag som inte anlitar en revisor har fattat ett ekonomiskt rationellt beslut. För att genomföra studien har vi använt oss av kvantitativ metod med deduktiv ansats som utgått från positivistisk kunskapssyn.   Vi har bland annat undersökt om ett antal nyckeltal skiljer sig mellan reviderade och oreviderade bolag. Nyckeltalen som vi har undersökt är “avkastning på eget kapital”, skuldsättningsgrad samt två olika nyckeltal för räntenivåer. Det kan finnas många skäl till varför nyckeltalen skiljer sig åt mellan grupperna därför har vi även tagit ett antal förklaringsvariabler i beaktande. Exempel på sådana förklaringsvariabler är omsättning och bransch. Till vår hjälp har vi laddat ner data från företagens årsredovisningar från cirka 70 000 bolag genom en databas.   Vi har även undersökt om företagsägarna anser att nyttan med revision överväger kostnaderna samt om utbildningsnivån inom redovisning skiljer sig mellan bolag som anlitar och inte anlitar revisor. Vi undersökte också hur rationellt företagsägarna agerar samt ett av studiens delsyften var att undersöka om oreviderade bolag köper mer hjälp med bokföringen än reviderade bolag. Urvalsramen bestod av företag som inte omfattas av revisionsplikt. För att genomföra studien har vi skickat ut en enkät via sms till 2 000 små onoterade aktiebolag.   Totalt formades sju nollhypoteser varav fyra fick förkastas. Slutsatserna av studien visade att bolag inte fattar ett ekonomiskt rationellt beslut med att inte anlita en revisor om de är i stort behov av extern finansiering. Anledningen är att dessa bolag betalar högre räntor som vid en hög belåning kan skillnaden i ränta mellan reviderade o oreviderade företag vara högre än revisionsarvodet. För övriga bolag som inte har stora skulder finner studien bevis för att företagsägarna fattar ett ekonomiskt rationellt beslut med att inte anlita en revisor eftersom de inte påverkas av räntenivåerna. Studien visade också att bolag utan revisor har lägre omsättning och lönsamhet samt har en lägre skuldsättningsgrad. Från enkäten kom vi fram till att företagsägare som inte anlitar en revisor har en högre utbildningsnivå inom redovisning/bokföring. Vi fann däremot inga bevis för att oreviderade företag köper mer konsultation inom redovisning än reviderade bolag.

Revisorns oberoende har diskuterats och ifrågasatts flitigt under många år då det är väldigt viktigt att revisorn behåller sitt oberoende främst vid utförandet av konsulttjänster. Enligt många forskare tenderar en revisor att riskera sitt oberoende mer på mindre revisionsbyråer då mindre revisionsbyråer är mer beroende av sina klienter. Dessutom kan revisorer på små revisionsbyråer enklare än stora revisionsbyråer utveckla en vänskapsrelation med klienterna på grund av byråns storlek vilket påverkar revisorns oberoende negativt. Syftet med studien är att bidra till förståelse kring hur revisorer på små, medelstora och stora revisionsbyråer upplever hot mot oberoendet samt undersöka om det finns skillnader i de olika byråstorlekarna. Studien baseras på kvalitativ forskning och för att kunna tolka revisorns uppfattningar har sex intervjuer genomförts med revisorer som arbetar på små, medelstora samt stora revisionsbyråer. De huvudsakliga slutsatserna som studien kom fram till är att storleken inte är betydande för upplevelse av hot mot oberoendet. Revisorerna på de olika byråerna av olika storlek upplevde liknande hot. Resultatet av undersökningen tyder däremot på att andra faktorer som erfarenhet, ålder och storlek på staden där revisionsbyrån är verksam, kan påverka revisorernas upplevelse av oberoende. / The auditor’s independence has been widely discussed and questioned for many years, since it is very important that the auditor does not risk his independence for instance when he is providing consulting services. The auditors’ independence is more at risk in smaller companies according to many researchers as they consider that smaller companies are more dependent on their clients and that there is a higher riskto bond with their clients and develop a friendship because of their small size. The purpose of this study is to investigate how auditors experience and reflect on independence threats and if there is a difference between smaller, medium and bigger auditor firms. The study is based on qualitative research and in order to interpret the auditor's experience, six interviews have been conducted with auditors working at small, medium and large auditing firms. The findings indicate that the size does not affect their independence. Instead the experience, age and the size of the city does. Therefor our proposals for future research could be to do a similar qualitative study but to focus on these factors too.

Sammanfattning   Revision är ett än mer aktuellt ämne nu än på flera decennier då det debatteras vitt och brett kring vad en revisor skall eller bör göra. I och med de tidigare införda byrårotationskraven begränsar det företag av allmänt intresse att inte under mer än maximalt tio år använda samma revisionsbyrå, med chans till förlängning. Vi har därför valt att undersöka hur längden på revisionsuppdragen kan inverka på stora onoterade bolag i en mindre geografisk zon, i vårt fall Umeå kommun med omnejd genom att intervjua tre revisorer och deras klienter.   Baserat på problemdiskussionen har vi bestämt följande problemformulering för studien.      Hur upplever revisionsbyråerna och deras klienter att oberoendet samt revisionskvalitet samspelar med revisionsprocessen vid korta respektive långa revisionsuppdrag?   Syftet med vår studie är att undersöka hur förhållandet mellan klient och revisor upplevs ha en samverkan med kvaliteten i revisionen samt på revisorernas oberoende till deras klienter över tid. Detta kan ligga till grund för framtida diskussioner gällande byrårotation för huruvida oberoende och revisionskvalitet utvecklas över tid under revisionsuppdraget.   Med en kvalitativ ansats har vi genomfört nio intervjuer med tre revisorer samt sex klienter. Klientförhållandena till respektive revisor är ett långvarigt revisionsuppdrag (fler än fem år) och ett kortvarigt revisionsuppdrag (mindre än 5 år sedan övertagandet). Denna unika inblick i revisor-klientförhållandet kopplas till flertalet faktorer samt teorier vilka kan ha en samverkan och förklaring till förändringen i oberoendet samt revisionskvaliteten.    Vi kommer i vår studie fram till att revisionsprocessen ser väldigt lik ut vid korta samt långa revisionsuppdrag där första året är speciellt omfattande, men år 2 och framåt vanligtvis är lika omfattande år efter år. Vad gäller oberoende finner vi att desto längre relation som skapas mellan klient och revisionsbyrå desto mer omfattande blir rådgivningen till klienten vilket kan påverka revisionsbyråns oberoende mot klienten rent finansiellt. Vidare är revisionskvalitet en term som definieras olika, men i teorin hävdar flertalet att detta kan speglas av oberoendet till klienten. I vår studie har definitionen uppfattats olika mellan revisor och klient vilket visar på ett förväntningsgap mellan de båda. Enligt respondenterna är revisionskvalitet något som skulle kunna förbättras av byrårotation när flera anser att långa revisionsuppdrag kan bli för rutinmässiga och att det skulle vara bra om nya individer kommer in och tittar på uppdraget från ett nytt perspektiv.   Förslag till vidare forskning skulle till exempel vara en enkätundersökning med ett mer omfattande geografiskt område där fler företag av större storlek innefattas av populationen för att kunna jämställa dessa med de företag som redan omfattas av reglerna om obligatorisk byrårotation.   Nyckelord: Audit, big four, big seven, audit quality, audit independence, audit firm rotation, auditor rotation, expectation gap, evidential matter, audit procedures och audit tenure.

The aim of this thesis is to problematize how and under what conditions organizational performance is constituted in the practices of performance auditing and accounting. Organizational performance disclosure is a world-wide phenomenon for enabling accountability relationships in large organizations regardless of the societal sector they operate in. In constitutive accounting literature, there is a well-established notion that accounting and performance auditing enable “government at a distance” by representing organizational actions and results of those actions, i.e. by constituting performance.  Accounting and performance auditing have been regarded as “technologies of government” that make government from spatial and temporal distances possible by linking political and programmatic ambitions, i.e., the will of a superior, to everyday organizational conduct. However, whereas many previous studies of accounting and performance auditing as technologies of government focus on the discourses over the technologies of accounting and performance auditing, this thesis focuses its analysis on the operationalization of these technologies in local organizational settings. By studying the constitution of performance in the practices of accounting and performance auditing this thesis contributes by problematizing that which supposedly makes government at a distance possible. The thesis is based on two case studies of performance audit and two case studies of performance reporting. On the basis of these papers, the thesis studies the constitution of performance in performance auditing and accounting. Whereas the constitution of performance may seem stable and unproblematic at the level of discourse, this thesis suggests that constituting performance is a complex process of social construction that requires significant organizational efforts and that the ability of accounting and performance auditing to connect political and programmatic ambitions to daily organizational conduct cannot be taken for granted. The thesis suggest that once we acknowledge that performance is a socially constructed representation of organizational actions and begin to pay attention to how performance is constituted in local organizational settings, we can find new ways of addressing the ongoing challenge of constituting performance in accounting and performance auditing and increase our understanding about the ability of these practices to enable government at a distance. / <p>At the time of doctoral defence the following papers were unoublished and had a status as follows: Paper nr. 2: Manuscript; Paper nr. 3: Manuscript; Paper nr. 4: Manuscript</p>

非審計服務究竟是否會影響會計師獨立性，長久以來即為各界關注焦點。本研究第一部分將驗證非審計服務對會計師獨立性的影響。此外，有別於美國要求全面揭露審計、非審計公費資訊，我國規定公開發行公司若符合一定門檻應揭露支付給會計師的各項公費資訊，本研究第二部份將探討我國採門檻制的公費揭露政策下，刻意隱藏公費資訊的公司，其會計師的獨立性是否會不同於無需揭露公司。最後一部份則為市場反應測試，探討市場是否能對公費資訊進行判斷，判斷公司刻意隱藏的情形並給予負面的評價。 實證果發現非審計服務的提供對會計師獨立性產生負面影響，而在我國採門檻制公費揭露政策下，刻意隱藏公費資訊公司進行盈餘管理的可能性越大，若我國之公費揭露政策若能改為全面性揭露將對會計師獨立產生正面影響。此外，市場反應部份結果顯示投資人並未考慮公費資訊的內涵。 關鍵詞：非審計服務、門檻制公費揭露、會計師獨立性、裁量性應計 / Whether or not the purchase of non audit services (NAS) impairs audit independence is the focus of a growing body of accounting research in the U.S. Using the data of Taiwanese list firms, this paper examines whether the association holds in environment other than that of the United States. In addition, compared to that in the U.S., Taiwanese Securities and Futures Bureau requires firm to disclose information on the audit and nonaudit fees under some circumstances. The second objective of this paper, therefore, is to explore whether some firms meeting the disclosure threshold have an incentive to avoid the disclosure requirement by concealing audit fee from external investors and regulators, and whether there is difference in the independence between firms which should have met the disclosure threshold otherwise and firms disclosing nonaudit fees. Finally, I investigate whether premium given by market participants varies among these two groups. We find that the purchase of NAS impairs audit independence, consistent with prior studies. We also document that firms which should have met the disclosure threshold otherwise are more likely to conduct earnings management relative to other firms, as predicted. Finally, our empirical results show that market participants are not able to distinguish these two groups. Key words: non-audit services, disclosure threshold, audit independence, discretionary accruals