This dissertation focuses on the globalization of audit markets. In particular, this dissertation is studying the entry of the Big Four accounting firms into India post-economic and political reforms of the early 1990s. The dissertation is comprised of three separate, but related studies. Each study appeals to prior research in accounting and related disciplines to examine the entry of the Big Four accounting firms in India. The first study appeals to audit market and economic research on incumbent pricing to examine ways in which local accounting firms in India adapted to the competition introduced by the Big Four accounting firms. The second study is an account of the change in the organizational field of the Indian accounting profession caused by the entry of the multinational accounting firms from 1990 to 2005 from a social constructionist perspective using the model of nonisomorphic change. The third study examines the change in the Indian accounting profession from 1990 to 2005 caused by the entry of the Big Four accounting firms in India from a critical perspective. It appeals to the theories of globalization to examine the change. Taken together, these studies attempt to provide the Big Four accounting firms useful information about the pricing strategies likely to be faced by them from local accounting firms in a new market, provide insights into the multiple roles played by professional associations in the process of radical change in the organizational field, and emphasize that globalization of accounting markets has not been accompanied by a level playing field for the local accounting profession in the globalized markets.

Yes / This study aims to provide a better understanding of the role of the Financial Reporting Council (FRC) in restoring public trust in audit profession in the UK. It analyses the views of partners in the Big 4 audit firms on this role. This study identifies three main strategies to promote trust and enhance the choice of auditors in the UK audit market. These strategies are improving audit quality, increasing the transparency of the big audit firms and reducing the barriers to competition in the audit market. The findings suggest that partners of the Big 4 believe that the FRC's projects effectively participate in improving audit quality as well as providing wider information about the audit firms to the public. However, different actions need to be taken to enhance the choice in the market.

Ongoing debates within the professional and academic communities have raised a number of questions specific to the international audit market. This dissertation consists of three related essays that address such issues. First, I examine whether the propensity to switch between auditors of different sizes (i.e., Big 4 versus non-Big 4) changes as adoption of International Financial Reporting Standards (IFRS) becomes a more common phenomenon, arguing that smaller auditors have an opportunity to invest in necessary skills and training needed to enter this market. Findings suggest that clients are relatively less (more) likely to switch to (away from) a Big 4 auditor if the client’s adoption of IFRS occurs in more recent years. In the second essay, I draw on these inferences and test whether the change in audit fees in the year of IFRS adoption changes over time. As the market becomes less concentrated, larger auditors becomes less able to demand a premium for their services. Consistent with my arguments, results suggest that the change in audit service fees declines over time, although this effect seems concentrated among the Big 4. I also find that this effect is partially attributable to a differential effect of the auditors’ experience in pricing audit services related to IFRS based on the period in which adoption occurs. The results of these two essays offer important implications to policy debates on the costs and benefits of IFRS adoption. In the third essay, I differentiate Big 4 auditors into three classifications—Parent firms, Brand Name affiliates, and Local affiliates—and test for differences in audit fee premiums (relative to non-Big 4 auditors) and audit quality. Results suggest that there is significant heterogeneity between the three classifications based on both of these characteristics, which is an important consideration for future research. Overall, this dissertation provides additional insights into a variety of aspects of the global audit market.

The main goal of my master thesis is to conduct a complex analysis of the confectionery market in Czech Republic, as one of the most profitable and dynamic category. The methodology that is used to analyse the market is the retail audit analysis, that provides an independent insight into the problem and helps to analyse the market from various perspectives. The first part is focused on the total confectionery market with the goal to introduce the market with its specifics, then the analysis goes deeper into the chocolate confectionery market and is extended by consumer research, that provides a useful consumer insight. As a result, the thesis emphasizes the importance of retail audit data, while at the same time gaps of the analysis are shown by using the consumer research as a secondary methodology.

In my dissertation, I examine factors associated with firms’ submission of auditor selection for shareholder ratification and test if shareholder ratification of auditor selection is associated with the extent of price competition in the audit market (as measured by audit fees) and audit quality (as measured by clients’ earnings management). The dissertation is motivated from the recent recommendation of the U.S. Treasury’s Advisory Committee on Auditing Profession (ACAP) regarding the submission of auditor selection for shareholder ratification votes. The ACAP suggests that this practice may improve the competition in the audit market; yet, there is no empirical evidence supporting the ACAP’s recommendation. My dissertation attempts to fill the gap in the literature on an issue of current interest to the auditing profession. I find that firm size, CEO-Chair duality, insider ownership and institutional ownership are associated with the submission of auditor selection for shareholder ratification vote. However, I do not find an association between audit committee variables and the submission of auditor selection for shareholder ratification vote. The second essay investigates the association between auditor ratification and audit fees. Audit fees are higher in firms that submit auditor selection for shareholder ratification. The finding is not consistent with the increased price competition predicted by the ACAP. The third essay of my dissertation examine whether the submission of auditor selection for shareholder ratification is associated with earnings management. I find that firms that submit auditor selection for shareholder ratification are more likely to have lower level of earnings management. Overall, the results suggest that the same factors that are associated with higher quality monitoring also may be associated with the submission of auditor selection for shareholder ratification vote. The results call into question the one-size-fits-all approach recommended by the ACAP.

The purpose of my dissertation is to examine whether competition among audit partners affects audit quality. While prior research on audit market competition focuses on audit firm-level or office-level analyses, I argue that audit partners, as the primary decision makers in providing audit services, are likely to engage in competitive actions in the audit market. Further, I use spatial distance among audit partners to measure partner-level competition. I conjecture that spatial distance could better reflect the dynamics of audit market competition than the Herfindahl index, the traditional proxy for competition used in most extant studies. Drawing on the spatial economics theory and the social comparison theory, I hypothesize a negative association between competition measured by spatial distance and the quality level delivered by the incumbent audit partner. Using newly available data of U.S. audit partners, this study provides evidence that audit quality is higher (lower) when the spatial distance between the incumbent partner and the closest competing partner is larger (smaller). In addition, the results reveal that the effects of competition measured by spatial distance on audit quality is mainly a partner-level phenomenon rather than an office-level one. Overall, this study highlights the importance of studying competitive dynamics among audit partners.

本研究以問卷調查方式，探討審計市場參與者（財務報表編製者、使用者及審計人員）對審計品質認知的差異，對於審計品質的衡量分為審計過程與審計結果，審計過程主要包括合約規劃階段、外勤工作與管理監督三階段及主要與查帳小組人員相關的因素，而審計結果的屬性則為事務所的規模、訴訟、聲譽及與事務所整體相關的因素。經由平均數分析、因素分析與變異數分析後，實證結果如下： 　　一、全部受試者認為最重要之審計品質屬性與最不重要之審計品質各有八個，並且審計人員較注重與審計過程相關之審計品質屬性，同時對於「了解客戶的行業」、「不對簽證客戶提供管理諮詢服務」及「採用統計技術」等項目的重要性，審計人員較其他參與者而言較不重視。 　　二、三組受試者對七個審計品質因素的認知上達成共識，故可以此做為提昇審計品質的明確方向。對於其他六個因素，受試者在認知上有顯著差異，其他參與者較審計人員認為「查帳人員具會計師資格」與「會計師事務所的外在形象」兩因素對審計品質更重要，表示審計人員應多注意這些因素。而審計人員則較其他參與者重視審計過程的因素，表示其他參與者在衡量審計品質時，除了注意審計品質的替代指標外，仍應考慮有關審計過程的品質屬性。

Šiame darbe yra atskleidžiama ir analizuojama audito pasiūla tenkanti kapitalo rinkoms, nagrinėjama jos nepakankamumo problema. Darbo tikslas yra, įvertinus globalius audito pasiūlos pokyčius ir jų įtaką kapitalo rinkoms, atlikti audito pasiūlos ir auditoriaus pasirinkimo veiksnių Baltijos šalių kapitalo rinkoms tyrimą. Darbas skirstomas į tris pagrindines dalis. Pirmojoje dalyje apibūdinamas auditoriaus vaidmuo bei jo reikšmė ekonomikai, atskleidžiamas sisteminės rizikos, kylančios iš audito rinkos pasiūlos nepakankamumo, mastas, aptariamos pagrindinės priežastys, lemiančios esamą audito pasiūlos struktūrą. Antrojoje darbo dalyje analizuojamas darbo objektas – išorinio nepriklausomo finansinio audito pasiūla kapitalo rinkoms, pateikiama darbo tyrimo metodologija. Trečiojoje darbo dalyje aprašomi atlikto tyrimo rezultatai, iškeltų darbe hipotezių tikrinimas, pateikiamos rekomendacijos tyrimo metu nustatytose probleminėse srityse bei tyrimo rezultatų taikymo ir tyrimo plėtotės galimybės. Gauti darbo rezultatai parodė, jog audito rinkos koncentracija visose trijose Baltijos akcijų biržose yra aukšta ir kelia sisteminės kapitalo rinkų rizikos pavojų. Pagrindiniais auditoriaus pasirinkimo veiksniais buvo priimti audituojamos įmonės dydis bei kapitalo kilmė. / This paper discloses and analyses the audit supply for the capital markets and examines its insufficiency problem. The aim of this paper is to evaluate the global changes in the audit supply and to perform a research of audit supply and influencing factors when choosing the auditor in the capital markets of Baltic countries. The paper consists of three main parts. The first part presents the role of the auditor and its significance to the economy, the extent of the systemic risk entailed by the insufficiency of the audit supply, discusses the main causes of the current structure of the audit market. In the second part of this paper the external independent financial audit supply for the capital markets, which is the object of this paper, is analyzed. Also, the research methodology is presented. In the third part of this paper the results of the research and hypothesis testing are presented. It also provides the guideline on the identified problem areas as well as applicability and development capabilities of the research made. The main conclusions showed that the audit market concentration in all three Baltic stock exchanges is high and poses a systemic risk to the capital markets. The key factors when choosing the auditor in the capital markets of Baltic countries is the size and the capital origin of the company.

Diese Dissertation umfasst drei Studien über Finanzberichterstattung gemäß International Financial Reporting Standards (IFRS) und Wirtschaftsprüfung. Da die IFRS ein prinzipienbasiertes Standardsystem sind, haben Abschlussersteller beabsichtigte Ermessensspielräume bei der Erstellung ihrer Finanzberichte. Die ersten beiden Studien widmen sich den Fragen, wie genau Abschlussersteller entsprechende Ermessensspielräume ausüben und inwieweit dies von der Wahl des Abschlussprüfers abhängt. Die erste Studie untersucht die Anhangangaben zu Ermessensentscheidungen und Schätzunsicherheiten (gemäß IAS 1). Sie liefert deskriptive Belege für ein insgesamt zunehmendes Niveau der Offenlegung dieser Anhangangaben und dafür, dass das Offenlegungsniveau über verschiedene Abschlussprüfer hinweg variiert. Inspiriert durch die Ergebnisse der ersten Studie widmet sich die zweite Studie der Frage, welche Arten von Abschlussprüfern (d.h. dominierende im Vergleich zu nicht dominierenden Abschlussprüfern) Unternehmen dazu motivieren, (mehr) relevante Angaben zu den erwarteten Auswirkungen der erstmaligen Anwendung des neuen IFRS 16 „Leasingverhältnisse“ im Erstanwendungsjahr offenzulegen. Die Ergebnisse deuten darauf hin, dass Mandanten dominierender Abschlussprüfer weniger standardisierte Angaben („boilerplate disclosures“) machen und der Zusammenhang zwischen der Leasingintensität und dem Detaillierungsgrad der Angaben bei diesen Mandanten stärker ist. Die dritte Studie nimmt die Ergebnisse der ersten beiden Studien zum Anlass, die Struktur des Prüfungsmarktes zu untersuchen. Der Fokus liegt hierbei auf der Entwicklung der Konzentration des Abschlussprüfermarktes in Großbritannien und Deutschland rund um eine regulatorische Änderung auf EU-Ebene, die neue Prüfungsanforderungen mit sich bringt, einschließlich der obligatorischen regelmäßigen Rotation von Prüfungsgesellschaften. Während die Ergebnisse auf einen etwa gleichstarken Rückgang der Konzentration der Prüfungsmärkte in beiden Ländern hindeuten, zeigen weitere statistische Tests, dass dieser Rückgang auf nationale Besonderheiten zurückzuführen ist. / This dissertation comprises three papers on financial reporting and auditing. The first two papers examine whether the extent to which the principles-based character of International Financial Reporting Standards (IFRS) allows management to exercise judgement in the preparation of firms’ disclosures is contingent on auditor-type. The first paper explores judgment and estimation uncertainty disclosures (IAS 1) and provides descriptive evidence on an overall increasing trend of disclosure levels and that disclosure levels vary in the cross-section, among other things, by auditor. Inspired by that, the second paper goes a step further and emphasises on the question what type of auditors (i.e., dominant in comparison to non-dominant auditors) motivate firms to provide (more) relevant disclosures on how they expect IFRS 16 – a new standard on leasing – to affect their financial statements in the period of initial application. Results suggest that clients of dominant auditors use less boilerplate disclosures and that the association between leasing intensity and disclosure detail is stronger for those clients. Due to the results of both papers suggesting that the auditor choice matters when firms face judgement in the preparation of their disclosures, the (development of the) audit market structure underlying certain regulations becomes relevant. Thus, the third paper takes these findings of the first two papers as motivation to examine the audit market concentration in the UK and Germany around a regulatory change at the EU level that entails new audit requirements including mandatory audit firm rotation on a regular basis. While aggregate statistics suggest a decrease in market concentration of similar size in both countries, further tests reveal that these decreases are driven by national peculiarities.

Revisorn anlitas för att ge ett oberoende yttrande som ska säkerställa pålitligheten i företagensfinansiella rapporter. Denna tilltrosskapandande effekt kan endast uppnås om revisorn görsina bedömningar och fattar beslut utan att låta sig påverkas av andra personers viljor ellerönskningar. Att revisorn är oberoende är särskilt viktigt i de fall revisorernas arbete påverkarintressenters beslutsfattande. Diskussionen kring revisorns oberoende i samband medtillhandahållandet av fristående rådgivning har debatterats flitigt. Vissa menar att denfristående rådgivningen medför positiva effekter på revisionen, medan andra anser att denborde förbjudas då den utgör ett hot mot revisorns oberoende och påverkar förtroendet förbranschen. Genom införandet av revisionspaketet står revisionsbranschen inför nyaregleringar av oberoendet och den fristående rådgivningen. Denna uppsats ämnar fördjupadiskussionen och undersöka varför det kan upplevas som ett problem när en revisionsbyrå, irollen som oberoende kontrollorgan, erbjuder både fristående rådgivning och revision.Frågeställningen besvaras med hjälp av relevanta teorier, modeller och intervjuer medrevisorer, intressenter samt normgivande organ. Den fristående rådgivningen kan medföra attrevisorn inte uppfattas som oberoende och kan utmana förtroendet hos allmänheten. Vidarekan det upplevas som ett problem när den fristående rådgivningen sker på revisionsklienter.Medias skildring av debatten, att det verkar föreligga ett förväntningsgap samt en bristandetransparens kan även det vara bidragande orsaker till problematiken. Revisionspaketet kankomma att öka transparensen, minska förväntningsgapet samt stärka förtroendet för branschenoch kan således komma att minska problematiken med att ett oberoende kontrollorganerbjuder både fristående rådgivning och revision. / Program: Civilekonomprogrammet