ABSTRACT Title: The effect of regulatory reforms on audit quality in a lax enforcement and high trust environment: A quantitative study on Swedish companies                      Level: Student thesis, final assignment for Master Programme in Business Administration  Author: Julia Owczarek Blom  Supervisor: Asif M Huq  Date: 2023 - May Aim: The aim of the study is to investigate the impact of regulatory changes on the consumption of non-audit services and the audit quality among the Swedish publicly listed firms on the Nasdaq Stockholm Stock Exchange. Specifically, the study focuses on whether there is a relationship between the 8th Directive on Statutory Audit and the EU Audit Package on non-audit services and the quality of audits. Furthermore, the study additionally investigates if the Swedish ownership structure has a negative impact on the audit quality among the companies.  Method: The method used in this study is based on a quantitative approach where the final sample that is empirically tested includes 626 Swedish large-, mid-, and small-cap firms listed on the Swedish stock market, Nasdaq OMX Stockholm. Moreover, the data consist of 5517 firm years and annual reports between the years 2001 and 2021.  Result and Conclusions: The result of this study suggests that the implementation of the 8th Directive on Statutory Audits has positively impacted audit quality, although it has not limited the consumption of non-audit services. Furthermore, the study further suggests that the EU Audit Package efficiently increased audit quality among the Swedish firms while, at the same time, decreasing the consumption of NAS. Although both regulations enhanced audit quality, the second regulatory change has been a lot more impactful than the previous one. In addition, the findings of the study suggest that the Swedish ownership structure, consisting of a single or few strong shareholders and companies being majority family owned, has a positive impact on audit quality. Contribution of the thesis: There have not been any studies investigating the impact of the 8th Directive and the EU Audit Package in a Swedish setting, and therefore this study provides insight on the topic. Furthermore, this is one of the first European studies investigating whether a concentrated ownership structure with the majority of firms being family owned has a positive or negative impact on audit quality. Suggestions for future research: For future research, it would be interesting to complement this study through a qualitative method with surveys or interviews to see what kind of NAS is currently most consumed by Swedish companies. Keywords: non-audit services, NAS, non-audit services in Sweden, audit fees, non-audit fees, auditor, audit quality, and auditor independence.

Purpose: The purpose of this thesis is to investigate the relationship between audit quality, with a specific focus on auditor size and audit fees, and the cost of debt and access to debt for medium-sized privately held enterprises in Sweden. Additionally, we seek to explore how family firms moderate these relationships.   Theoretical perspective: This paper combines signaling theory and agency theory to theorize how Big-4 classifications of audit firms and audit fees signal audit quality and different levels of agency cost of debt to creditors. Further, it explores the moderating effect of family firms using socioemotional wealth theory alongside agency theory.   Method: This study is based within the positivistic paradigm, employing a deductive approach. The study uses a quantitative methodology, gathering data from 463 medium-sized privately held enterprises in Sweden. The empirical data is analyzed using multiple linear regressions, with the moderating effects of family firms.    Findings: The findings of this study suggest that firms engaging Big-4 audit firms do not experience lower costs of debt nor improved access to debt. However, audit fees demonstrate a positive relationship with both the cost of debt and access to debt. Further, the study indicates that family firms do not have a moderating effect on these relationships.

In 2010, the obligation to audit was abolished in Sweden with the aim of promoting entrepreneurship and minimizing its costs. As a result, today the majority of small private limited companies choose not to have an audit. Furthermore, there is a negative trend in the audit industry as the number of qualified auditors has decreased significantly since the abolition of the audit obligation.   Considering the 2017 review report by Riksrevisionen, which concluded that the audit obligation should be reintroduced in Sweden, this thesis addresses the question of whether the audit obligation should be reintroduced in Sweden. Previous research in other geographical areas indicates that auditing has positive effects for companies by increasing the quality of their financial reports. Moreover, further research indicates that there are no compelling reasons to mandate auditing for small private companies and that the auditor could be replaced by an accounting consultant. This relatively understudied area is therefore worthy of investigation, partly because of the inconsistent results observed in previous research and partly because few studies are based on Swedish society. The objective of this thesis is to examine the various perspectives on the removal of the audit obligation and to contribute to the debate on whether a reintroduction should be considered. Additionally, the study aims to assess the impact of a potential reintroduction of the audit obligation on the quality of reporting for the companies concerned. The thesis addresses the roles of auditors and accounting consultants for small private limited companies in Sweden. Through the qualitative method of interviewing company managers, auditors, and accounting consultants, the positions of these stakeholders are elucidated.  The results of the study indicate that the majority of respondents do not believe that the audit obligation should be reintroduced in Sweden. This is because the results suggest that an authorized accounting consultant can effectively serve as a substitute for the auditor for small private limited companies, thereby compensating for the potential loss of quality that may arise in the absence of an auditor. Additionally, the results demonstrate that auditing provides a quality stamp, but that the benefits of this do not exceed the costs incurred by the companies. The primary rationale for opposing the reintroduction of auditing is that the current audit methodology is ill-suited to the needs of small private limited companies, resulting in excessive costs. Moreover, the results strongly suggest that some form of external control is necessary, rather than mandatory auditing. Potential solutions include increased controls from Skatteverket or requiring an authorized accounting consultant. In conclusion, the findings demonstrate that auditing is a valuable practice with beneficial effects for both businesses and society at large. Nevertheless, the evidence suggests that there are currently insufficient compelling reasons to advocate for the reinstatement of mandatory audits in Sweden.

本文以2005年至2014年間中華人民共和國上海及深圳上市公司為研究對象，參照Beck and Mauldin (2014)衡量審計委員會與財務長之間相對影響力之模式，從公司治理觀點分析選任個人層級及事務所層級之產業專家會計師，是否與審計委員會相較於財務主管較具有影響力有關聯性，並參考過去發展的文獻，以多種衡量產業專家之方法執行敏感性分析。本研究結果顯示，當企業之審計委員會相較於財務主管之相對影響力較大時，與個人層級之產業專家及同時為個人層級及事務所層級之產業專家會計師具有顯著正相關、與會計師事務所層級之產業專家呈現不顯著相關，故可推論，審計委員會相對較有影響力時會傾向選擇會計師個人產業專家。 / The primary objective of this thesis is to examine whether and how the relative power of the CFOs to audit committee affects the choice of auditor’s industry specialization, measured as firm level and partner level. We focus my analyses on a sample of listed firms in China during 2005-2014. We follow the measure of the relative power of CFO and audit committee by Beck and Mauldin (2014) to test my predictions. My main findings can be summarized as follows. First, the thesis finds evidence that firms are more likely to choice firm-level audit experts when its CFO is less powerful than audit committee. Second, it also finds that firms are more likely to hire partner-level audit experts when audit committee is relatively powerful than the CFO. The results are robust to other proxies for audit experts.

Sammanfattning Examensarbete i företagsekonomi, Högskolan i Skövde.Kandidatuppsats, Externredovisning, vårterminen 2016 Bakgrund: Datorer har under ett halvt sekel använts i näringslivet och revisorer har använt datorer i revisionsprocessen sedan 1980-talet. Teknik är menat att effektivisera revisionen och möta behov av automatisering för att öka lönsamheten, minska tidsåtgången och underlätta revisorernas arbete. Betydelsen och utnyttjandet av automatisering och informationsteknik [IT] i revisionen har ökat kraftigt under 2000-talet som en följd av den tekniska utveckling som sker i samhället. Revisionsbevis går från papper till elektronisk form och informationssystem [IS] kontrollerar data med lite eller helt utan mänsklig inblandning. Branschens digitalisering innebär flera fördelar som flitigt belyses i litteraturen, medan eventuella nackdelar och risker lämnas obelysta.FAR publicerade år 2013 en framtidsstudie där de önskar förbereda branschen på olika förändringar och vara i framkant för att undvika fallgropar och utnyttja möjligheter. I studien utreds flera framtida drivkrafter och en av dem är digitaliseringen. Flera fördelar med digitaliseringen belyses, men också här missas eventuella nackdelar och risker. Syfte: Syftet med denna studie är att, genom att undersöka dagens yrkesverksamma revisionsutövare syn, öka revisionsbranschen och revisionens intressenters förståelse för hur revisionens tillförlitlighet och revisionsrisker påverkas av digitaliseringen. Metod: Studiens empiriska material samlades in genom en kvalitativ metod. Nio revisorer och tre personer som arbetar med risker inom revision och IT-revision har intervjuats genom elva semistrukturerade intervjuer. Slutsats: Studien har kommit fram till att revisorerna i studien och forskningen är eniga om att digitaliseringen innebär flera positiva effekter för revisionen. Exempelvis en ökad kvalitet på slutprodukten, effektivare revisionsprocess och minskad upptäcktsrisk genom att större datamängder kan analyseras. Det föreligger dock en tvetydighet kring huruvida det påverkar revisionens tillförlitlighet som slutprodukt. Studien har visat att yrkesverksamma revisorer har svårt att se risker med den tekniska utvecklingen. Studien har även visat att revisorerna inte har eller anser sig behöva några speciella IT-kunskaper, samtidigt som forskningen menar att IT-kunskaper är mycket viktiga för revisorernas förmåga att göra kvalificerade riskbedömningar. Nyckelord: Revision, digitalisering, tillförlitlighet, förtroende, revisionsrisk, revisionskvalitet, revisionsautomatisering, IT, teknik, IT-revision, ARM. / Abstract Degree in Business Administration, University of SkövdeBachelor Thesis, Financial Accounting, spring term 2016 Background: Computers have been used for half a century in business and auditors have been using computers in the audit process since the 1980s. Technology is meant to make the audit more efficient and meet the needs of automation to increase profitability, reduce the timescale and facilitate the work of the auditors. The meaning and utilization of automation and information technology [IT] in the audit has increased greatly in the 2000s as a result of technological developments taking place in society. Audit evidence goes from paper to electronic and information systems [IS] controls data with little or no human intervention. The industry digitization has several advantages as extensively illustrated in the literature, but the possible disadvantages and risks left not observed. FAR published in 2013 a prospective study in which they wish to prepare the industry to various changes and be in the forefront to avoid pitfalls and exploit opportunities. The study investigated several future drivers and one of them is digitization. Several benefits of digitization are illuminated, but also this study missed potential disadvantages and risks. Purpose: The purpose of this study is that, by examining today's professionals audit practitioners sight, improve the accounting profession and audit stakeholders' understanding of how the reliability of audit and audit risks are affected by digitization. Method: The study's empirical material was gathered through a qualitative method. Nine auditors and three people working with risk assurance and IT audit have been interviewed through eleven semi-structured interviews. Conclusion: The study has concluded that the auditors of the study and research agree that digitization brings several positive effects for the audit. For example, a higher end product quality, a more efficient audit process and reduced detection-risk as a result of larger amounts of data being analyzed. However, there is an ambiguity as to whether it affects the reliability of the audit as a final product. The study has shown that practicing auditors has difficult to see the risks of technological progress. The study has also shown that the auditors did not have or think they need any special IT skills, but research says that IT skills are very important for the auditor's ability to make qualified risk assessments. Keywords: Audit, digitization, reliability, trust, audit risk, audit quality, audit automation, IT, technology, IT audit, ARM.

SAMMANFATTNING   Titel: Tidspressens påverkan på revisionen: En studie om hur svenska revisorer motiverar sina tidsbesparande handlingar under tidspress. Nivå: C-uppsats i ämnet företagsekonomi. Författare: Elizabeth Puhls och Linnea Svedin. Handledare: Jan Svanberg. Datum: 2016- januari.   Syfte: Tidigare forskning har lagt lite fokus på revisorns egna uppfattningar kring revisorers agerande på grund av tidspress. Studiens syfte är att få en förståelse för hur svenska revisorer på små och medelstora revisionsbyråer motiverar åtgärderna som de brukar vidta för att få fram ett bra revisionsarbete inom snäva tidsbudgetar.   Metod: Insamlingen av det empiriska materialet sker med hjälp av kvalitativa semistrukturerade intervjuer. Analysen genomförs genom att jämföra egna empiriska data med redan existerande teori. Våra slutsatser dras från egna iakttagelser och insikter.   Resultat och slutsats: Revisor rättfärdigar sitt agerande genom att stödja sig på begreppen väsentlighet och risk vilket de kopplar till klientkännedom och helhetsbedömningar. Revisorns förmåga att förhålla sig professionellt skeptisk har visat sig ha en inverkan på förekomsten av RAQ-acts (Reduced audit quality acts).   Förslag till fortsatt forskning: Återkommande i studien var begreppen väsentlighet och risk. Vi ser potential för att utforska dess betydelse för tidspressen och revisorernas agerande ännu mer. Vi ser möjligheter till att utveckla intervjuguiden och lägga mer fokus på dessa begrepp i den fortsatta forskningen.   Uppsatsens bidrag: Studien lämnar bidrag till redovisningslitteraturen, personer som utövar revisionsyrket samt klienter genom förståelse för hur revisorerna själva ställer sig till de genvägar som de ibland tar för att spara in på tiden.   Nyckelord: revision, pressfaktorer, tidsbudget, tidspress, revisionskvalitet, underrapportering av tid, professionell skepticism. / ABSTRACT   Title: Time pressure's impact on auditing. A study of how Swedish auditors justify their timesaving actions when they work under time pressure. Level: Final assignment for Bachelor Degree in Business Administration. Authors: Elizabeth Puhls and Linnea Svedin. Supervisor: Jan Svanberg. Date: 2016 - January.   Aim: Little focus has been put on auditors’ own perceptions about their reaction to time pressure. Our aim, therefore, is an understanding of how Swedish auditors, working in small and medium sized firms, justify the solutions they take to obtain credible accounting work within a tight time budget.   Method: The collection of empirical material is done using qualitative semi-structured interviews. The analysis is carried out by comparing the empirical data with existing theory. Our conclusions are drawn from own observations and insights.   Result and conclusions: Auditors justify their actions by relying on the concepts essentiality and risk, which they relate to client awareness and overall assessments. It’s been shown that auditors’ ability to maintain their professional skepticism has an effect on the existence of RAQ-acts (Reduced audit quality acts).   Suggestions for future research: The concepts essentiality and risk were consistently repeated by the auditors in the study. We see the potential to explore further their significance related to time pressure. We see opportunities to develop the interview guide in order to place more focus on these concepts in future research.   Contribution of the thesis: This study contributes to accounting literature, people who practice auditing and clients by presenting an understanding of how auditors themselves justify the shortcuts they take in order to meet their time budgets.   Key words: Audit, pressure factors, time budget, time pressure, audit quality, underreporting of time, professional skepticism.

自2005年開始PCAOB對外國之註冊會計師事務所進行國際檢查，至今已逾十年，然而制度實施之初面臨許多質疑。而今，已有文獻指出不論是美國或是其他國家，PCAOB的檢查皆具有一定效益，且具有外溢效果。惟各國間的國家特性因素於目前文獻中尚有發展空間，因此本研究欲了解國家特性是否會影響PCAOB國際檢查的外溢效果。 　　本研究以2004年至2013年間35國的資料計算裁決性應計數，以此代理審計品質，觀察各國審計品質於檢查前後的變化，並以法規執行力以及四大會計師事務所市占率代理國家特性，進一步了解不同特性的國家，其審計品質改變幅度的差異。 　　根據實證結果發現，當一國的法規執行力較高或是四大會計師事務所市占率較高時，審計品質較佳，因此於PCAOB國際檢查後審計品質提升幅度較小。各國的準則制定機構可透過本研究的國家分類，量身訂定更符合國家的準則，以改善審計品質。 / Since 2005, PCAOB has inspected foreign registered audit firms for a period over ten years. The benefits of inspection in both the United States and other countries are documented by extant literature, but the research of country characteristics on the spillover benefits is still lacking. In this study, we document how country characteristics influence the spillover effect of PCAOB international inspection on audit quality. This study uses discretionary accruals as the proxy of audit quality. Our data of non-US-listed companies from 35 countries during 2004-2013 are taken from Datastream. In addition, we use legal enforcement and Big 4 dominance to investigate how country characteristics affect the magnitude of audit quality changes. According to empirical results, we find that countries with higher legal enforcement or Big 4 dominance provide better audit quality. Therefore, PCAOB international inspections in these countries generate smaller magnitude of audit quality improvement than in countries with lower legal enforcement and Big 4 dominance . Our results suggest that regulators of different countries should develop more tailored regulation in order to improve audit quality of their respective countries.

在國內外陸續爆發財務報表舞弊案件(如安隆、博達等)後，我國主管機關透過增修各項規範(如會計師法、上市上櫃公司治理實務守則等)以及準強制性會計師輪調的實施，加強會計師的法律責任與獨立性，期許能確保會計師的審計品質，並保障投資人的權益，維護資本市場的健全。 在文獻回顧中發現，會計師的任期對審計品質的影響，目前尚未有較一致的看法；有學者主張強制性會計師輪調下，繼任會計師需付出較高的審計初始成本，且因對產業及公司之不熟悉，導致繼任會計師於審計初始任期時，審計品質反而較前任會計師低落。我國遭受懲戒會計師之審計品質較未受懲戒會計師低，但會計師遭受停業懲戒後，繼任會計師並未能對審計品質有所改善。本研究欲探討企業歷經會計師遭受停業而被迫必須予以更換下，繼任會計師在更換初期及擔任較長任期後的審計品質，相較原任會計師的審計品質是否有差異。 本研究以裁決性應計數報導幅度作為衡量審計品質的代理變數，參考相關文獻建立研究模型，並以台灣金管會證期局於民國96年公佈之近5年會計師懲戒名單為基準樣本，找出受懲戒會計師之客戶公司為觀察樣本，分析當企業因原任會計師受懲戒被停業或除名而必須更換會計師時，繼任會計師是否能改善原任會計師較差的審計品質，結果並未能發現繼任會計師審計品質相較原任會計師有顯著改善的證據。本研究進一步分析所內繼任會計師(相對初始成本較低、但獨立性亦較低)及所外繼任會計師(相對初始成本較高、但獨立性亦較高)間，審計品質改善是否有所差異，結果未能發現兩者有顯著的差異。 / From USA to Taiwan, lots of financial scandals have disheartened investors in recent years. For the purpose of improving audit quality of financial reports and protecting interests of the investing public, regulators in Taiwan instituted new rules and implemented a “quasi-forced CPA rotation system” to enhance auditors’ legal responsibility and independence. In literature review, findings about the relationship between auditor tenure and audit quality are not all consistent. Under forced CPA rotation, because of the necessary higher start-up cost and unfamiliarity of client business, succeeding auditor’s audit quality is often lower than the predecessor. Prior studies find the audit quality of sanctioned CPAs to be lower than those not sanctioned, and their succeeding auditors who replace CPAs whose licenses’ are suspended can not improve the audit quality significantly. The purpose of this study is to investigate the difference between the audit quality of predecessor CPAS, who are under temporary suspension of license and that of their successor auditors both at the initial stage of the change several years afterwards. ABSDA is the proxy of audit quality in this study, and a model based on literature to date is developed. This study uses the CPA sanction cases posted on the website of the Securities and Futures Bureau (SFB). The client firms whose CPAs were sanctioned by regulatory authorities during the part five years are taken as samples in the research. The empirical tests find that succeeding CPAs can’t significantly improve the audit quality subsequent to the change. Moreover, the study tests if the succeeding CPAs from the same firm of the predecessor CPA can make greater improvement on audit quality than succeeding CPAs from another firm can. The findings show no significant difference between those two either.

本研究探討分析師在進行盈餘預測時是否會考慮會計師的審計品質。不同於過去文獻，本研究除了測試「品牌層級」的審計品質（brand-name level audit quality）與「事務所層級」（firm level audit quality）的審計品質外，利用我國簽證制度進一步檢視分析師盈餘預測之品質是否因會計師個人層級之審計品質 (individual-level audit quality) 的差異而有所不同。本研究以Heckman (1979) 之兩階段模型來控制會計師選擇內生性的問題，進行實證分析。實證結果顯示：(1) 四大會計師事務所對於分析師預測準確度具有正面影響，但侷限於小規模公司，呈現顯著正相關。(2) 四大事務所彼此之審計品質對於分析師預測準確度與離散程度之影響，並無顯著之差異，但整體來說，資誠會計師事務所之表現最佳，而小規模公司中，安永之表現較差；大規模公司中，勤業眾信之表現較差，此與一般市場所認知者不同。(3) 當分析師盈餘預測之對象為小規模公司時，審計品質最差的個別會計師會降低（提高）分析師預測準確度（離散程度）。反之，測試對象為大規模公司時，審計品質最佳的個別會計師會降低分析師預測準確度但，審計品質最差者，與本研究預期不符。結果顯示我國之分析師在進行盈餘預測時，會考量個別會計師之審計品質。 / This paper investigates the association between audit quality and properties of analysts’ earnings forecasts. Three levels of audit quality are identified and examined: brand-name level (proxied by a dummy Big 4), firm level (proxied by four dummies DT, PWC, KPMG, and EY), and individual-level (proxied by the average of the absolute values of discretionary accruals for all companies audited by the same auditor, grouped by quartiles). After separating sample companies into big, medium, and small sizes, the empirical results document several important findings. When audit quality is measured at the brand-name level, Big 4 improve analysts’ forecast accuracy for small companies only. However, Big 4 do not decrease analysts’ forecast dispersion. When the audit quality is measured at the firm level, analysts seem to regard EY and DT as of relatively low audit quality when small and big companies are the forecast targets, respectively. When the audit quality is measured at the individual level, auditors who are deemed to have the lowest audit quality (i.e., in the fourth quartile) are associated with less forecast accuracy and greater forecast dispersion in small companies. In contrast, auditors who are deemed to have the highest audit quality (i.e., in the first quartile) are associated with lower forecast dispersion in big companies. Taken together, the empirical results indicate that audit quality affects analysts’ forecast properties. More importantly, analysts are able to identify individual auditor’s audit quality and react accordingly.

Syfte: Större revisionsbolag har länge inom redovisningslitteraturen associerats med bättre revisionskvalitet jämfört med mindre revisionsbolag. På senare tid har frågan lyfts om större revisionsbolags höga revisionsarvoden beror på högre revisionskvalitet eller marknadsmakt. Denna studie bidrar med nya empiriska underlag inom jämförelsestudier mellan större och mindre revisionsbolag, där revisionsarvodet används som proxy för revisionskvalitet. Vidare tar denna studie, till skillnad från tidigare studier, även hänsyn till revisionskvalitet inom olika riskmiljöer.   Metod: Studien har använt sig av en kvantitativ metod med ett positivistiskt förhållningssätt genom arbetet. En deduktiv forskningsansats har tillämpats där tidigare forskning har legat som grund till studiens framförda hypoteser. Insamling av finansiella sekundärdata för totalt 2518 företag har utförts via databasen Thomson Reuters Datastream.   Resultat & slutsats: Studiens resultat påvisar signifikanta skillnader i revisionskvalitet mellan större och mindre revisionsbolag i studiens olika riskmiljöer. För studiens europeiska länder är förhållandet mellan större och mindre revisionsbolag likvärdiga medan de amerikanska revisionsbolagen skiljer sig signifikant revisionskvalitetsmässigt.   Förslag till fortsatt forskning: Studien har genomförts utan hänsyn tagen till kvalitativa faktorer som kan komma att påverka revisionskvalitet, vilket öppnar ett utrymme för komparativa studier med en kvalitativ inriktning. Det finns även möjlighet att utöka antalet börsmarknader för respektive land eller utvidga antalet länder i olika riskmiljöer.   Uppsatsens bidrag: Studien lämnar två bidrag till redovisningslitteraturen i form av nya empiriska bevis inom revisionskvalitet mellan större och mindre revisionsbolag samt unik forskning kring revisionskvalitetsstudier mellan riskmiljöer. Vidare lämnar studiens resultat incitament åt praktiker att granska revisionsmarknaden för eget vinstintresse samt svarar på normgivares funderingar kring marknadsbalansen mellan större och mindre revisionsbolag. / Aim: Big audit firms have long been associated with higher audit quality, compared to smaller audit firms. Recent studies suggest that the higher audit fees from bigger audit firm is affected by market misuse rather than better audit quality. This study provides new empirical evidence between the comparison of big vs small audit firm, where audit fees are used as proxy for audit quality. Furthermore, this study investigates different litigation environment that could affect audit quality.   Method: This study uses an quantitative based method with an positivist, deductive approach, were earlier studies have had an impact on our hypotheses. Financial information from 2518 companies has been collected from Thomson Reuters Datastream.   Result & Conclusions: This study's result provides significant differences of audit quality between big and small audit firms in different risk environments. For this study, the audit quality relationship between big and small audit firms are equivalent for the European countries while audit quality between big and small audit firms in the US differ significantly.   Contribution of the thesis: This study leaves two contributions to the extent audit literature, in terms of empirical evidence of audit quality between big and small audit firms and unique research results of audit quality in different litigation environments. Furthermore, the results of this study creates incentives for practitioners to review the audit market for self interests and answer legal setters concerns about unbalanced audit markets.   Suggestions for future research: The study has been carried out without consideration of qualitative factors that may affect audit quality. It’s opening a space for comparative studies with an qualitative approach. It is also possible to expand the number of stock exchanges for a country or expand the number of countries in different risk environments.