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.

As the workplace has evolved over the past few years, several studies have documented perceived differences in personalities, values, and preferences between generations in the workplace, including in public accounting. In this study, I examine whether exposure to a negative preconceived belief about a staff auditor's generation (generational stereotype) influences the affective state of staff auditors and ultimately causes them to reduce the extent to which they communicate with a client manager to gather the necessary information to perform an audit adequately. I also investigate whether attribute affirmation from a work buddy helps elicit positive affect to mitigate the effects that exposure to negative generational stereotypes may have on audit evidence collection. I conducted a 2 x 2 experiment using graduate auditing students as a proxy for staff auditors. I find that general affect (i.e., mood) rather than interpersonal affect (i.e., likability), drives the negative effect of exposure to generational stereotypes on willingness to collect more audit evidence. I also find that high levels of negative mood can negatively impact participants' self-efficacy. I, however, failed to find evidence of a moderated mediation. The presence of an attribute affirmation results in an insignificant increase in positive affect. When staff auditors are exposed to a negative generational stereotype, attribute affirmation does not evoke enough positive affect to help auditors overcome the generational stereotype threat.

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The Public Company Accounting Oversight Board (PCAOB) has recently begun inspecting foreign audit firms. An important policy concern is that several foreign jurisdictions have refused to allow the PCAOB to conduct inspections of their audit firms. In this dissertation, I investigate (1) whether audit quality is higher for client firms (henceforth "complying" clients) whose foreign auditors have been inspected by the PCAOB, compared to client firms (henceforth "blacklisted" clients) of foreign auditors whose governments have refused inspections by the PCAOB, and (2) whether audit quality improves in the post inspection period for clients of inspected foreign auditors. I use abnormal accruals, total accruals, value relevance, and the likelihood of receiving a going concern opinion as proxies for audit quality. I conduct empirical tests on two samples, a cross-sectional sample consisting of blacklisted and complying clients, and a longitudinal sample of clients of inspected foreign auditors before and after PCAOB inspections. For the going-concern models, the samples are confined to financially distressed firms, which are either clients with negative net income or negative operating cash flows or clients in the top quartile in the bankruptcy probability distribution. The cross-sectional models indicate that blacklisted clients have significantly higher abnormal and total accruals, lower value relevance and a lower likelihood of receiving a going concern opinion, than complying clients, suggesting that clients of PCAOB-inspected auditors seem to have higher audit quality. Moreover, longitudinal analyses of clients of inspected foreign auditors show that abnormal accruals and total accruals are lower after PCAOB inspections than before inspections, and value relevance is greater after inspections than before. The likelihood of receiving a going concern opinion is higher after PCAOB inspections than before inspections for one of the two distressed-firm samples. Overall, the results are generally consistent with the PCAOB's claim that the clients of foreign audit firms that have undergone PCAOB inspections have benefited from the inspections. Further analyses indicate that the benefits are concentrated in jurisdictions where the PCAOB has conducted joint inspections with local authorities, in countries where legal traditions follow common law, and for clients of Big 4 auditors. / Business Administration/Accounting

Yes / Despite the importance of the ongoing debate on audit tendering and its possible implications for the audit profession including audit market structure, audit quality, and auditor independence, there is an apparent lack of research into this area. Using content analysis, this study reports the results of an examination of the comment letters sent to the UK Financial Reporting Council (FRC) in response to its consultation document on the 2012 revisions of the UK Corporate Governance Code. The results indicate a general support for the FRC’s proposals with a number of key concerns related to audit quality, audit cost and auditor independence. There is also clear conflict of interests among some groups such as audit firms and companies on one side and institutional investors on the other side. There is evidence of conflict of interest between Big 4 and non-Big 4 audit firms. The findings could influence future revisions of the Code with regard to tendering and enhance policy makers’ understanding of the position taken by each group of stakeholder.

Senast den 17 juni 2016 ska Sverige ha implementerat regleringar kring obliga- torisk byrårotation i nationell rätt vilket då kommer kräva att noterade bolag och finansiella företag roterar revisionsbyrå i huvudregel var 10:e år. Målet från EU:s sida med att införa obligatorisk byrårotation i dess medlemsländer är att regleringen ska ha positiva effekter på revisorns oberoende, revisionskvali- teten och konkurrenssituationen på revisionsmarknaden. Syftet med vår studie är att ge ökad förståelse om hur revisionskvaliteten och revisorns oberoende påverkas av ett införande av obligatorisk byrårotation utifrån den forskning som finns internationellt. Eftersom studier kring obliga- torisk byrårotation ännu har kunnat genomföras i Sverige vill vi också bidra med kunskap om hur väl dessa internationella studier kan appliceras i ett svenskt sammanhang. Studien är baserad på inhämtning av sekundärdata där vi utgått från existe- rande forskning kring obligatorisk byrårotation. Val av vårt tillvägagångssätt kan motiveras med att en stor mängd forskning redan existerar och vi har velat samla in data som är så neutral som möjligt. Vår studie visar att resultaten från internationellt genomförda studier tyder på att revisionskvaliteten sjunker vid ett införande av obligatorisk byrårotation. Forskningen visar även att regleringen kan få en motsatt effekt på marknads- dynamiken än vad som önskas. Majoriteten av forskningen visar också att revi- sorns oberoende inte påverkas vid ett införande av obligatorisk byrårotation. I den del av vår studie som behandlade hur väl internationell forskning skulle kunna tillämpas i Sverige fann vi inga belägg på att skillnaderna mellan de un- dersökta länderna och Sverige skulle vara tillräckligt stora för att kunna ifråga- sätta dess applicerbarhet i ett svenskt sammanhang. / June 17, 2016, is the final date for Sweden to implement the new rules regard- ing mandatory audit firm rotation which will require listed and financial com- panies to change their current audit firm every 10 years. The aim of the intro- duction of mandatory audit firm rotation is that the regulation should have positive effects on the independence of auditors, audit quality and the compet- itive situation within the audit market. The aim of this study is to provide a better understanding of how auditor in- dependence and audit quality is affected by the introduction of the regulation on the basis of the available international research. Since there isn’t any Swe- dish research on the subject, we want to contribute knowledge about how well these international studies can be applied in a Swedish context. The study is based on secondary data which is collected from already existing research on mandatory audit firm rotation. The choice of approach in the study can be justified by the fact that much research already exists on the sub- ject and we wanted the data to be as neutral as possible. Our study shows that the results from international research suggest that audit quality will decrease with the introduction of such regulation and that the regu- lation may have an adverse effect on the dynamic of the audit market. A ma- jority of the research suggests that auditor independence is not affected by the introduction of mandatory audit firm rotation. In the part of our study, which dealt with how well international research is applicable in Sweden, we found no evidence that the difference between the examined countries and Sweden would be large enough to allow us to question the research applicability in a Swedish context.

Sedan lagändringen år 2010, gällande avskaffandet av revisionsplikten för små aktiebolag, ställs numera företag inför ett val. Likt samtliga företag så krävs ett ställningstagande om vilken revisionsbyrå som väljs att anlitas. Ett litet aktiebolag antas, på grund av mindre resurser, behöva överlägga för- och nackdelar i högre grad än större företag. Vilket leder till studiens syfte som är att ta reda på vilka faktorer som påverkar små aktiebolags val av revisionsbyrå. Tidigare forskning och redovisningsteorier tyder på att det inte bara är små aktiebolags värderingar som leder till vilken revisionsbyrå som väljs, utan också företagets struktur påverkar valet. Därför är studiens avsikt att både analysera revisionsbyråers skiljande faktorer samt företagsstrukturen hos små aktiebolag. Detta görs med hjälp av en enkätundersökning som skickas ut till slumpmässigt valda företag i Sverige. Studiens resultat bekräftar en del av tidigare forskning. Det påvisas att sannolikheten att ett litet aktiebolag väljer en revisionsbyrå inom Big 4 ökar med företagets storlek samt företagets skuldsättningsgrad. Vidare tyder resultatet på att desto mindre priskänsligt företaget är och desto mer de värdesätter kvalité, personlig relation och varumärke, ju troligare är det att Big 4 väljs. Studien ämnar att ge en bättre förståelse kring revisionsvalet samtidigt som både små aktiebolag och revisionsbyråer kan fokusera på de faktorer som inverkar valet. Som framtida forskning anses revisorn som oberoende vara ett intresseväckande område att fördjupa sig mer i. / Since 2010 when the accounting laws in Sweden cha four nged, small businesses are now facing a choice whether to be audited or not. Like all businesses, this includes a choice regarding what auditing firm to hire. Small businesses must consider the pros and cons in greater extent than bigger businesses because of their overall lower resources. This leads to the purpose of the study which is to find out what factors affect the choice of selecting an auditing firm. Previous research and accounting theories suggest that, in addition to the factors of the auditing firm, the business’ corporate structure can affect their choice. Therefore, the study is aiming to analyze both the auditing firms various characteristics and the corporate structure of the business. This is performed by sending out a survey to randomly selected small businesses in Sweden and analyzing the data once received. The result of the study partly confirms the previous studies conducted in the same field. It indicates that the probability for a small business to choose an auditing firm within Big four increases with the business size and the gearing ratio. Further, the result indicates that the less price sensitive a business is. So, the higher they value auditing quality, personal relationship and that the auditing firm is well-known, the higher is the probability that they will decide to hire an auditing firm within Big firms. The research is aiming to increase the understanding regarding auditing choice and help both the auditing firms and the companies to understand what factors can affect the choice. As a topic for future research, we find that the auditors’ independence would be interesting, since this research indicates the relevance of it.

Syftet med denna studie är att förklara och förstå digitaliseringens påverkan på revisionen. Revisionsbranschen är idag inne i en betydande förändringsprocess där traditionella metoder ersätts med modernare revisionstekniker. Digitaliseringen sägs vara en stark drivkraft till denna förändring, vilket har en stor påverkan på yrket. Genom att kunderna blivit mer digitala, samt att nya digitala revisionsverktyg har utvecklats, skapas möjligheten för en ny typ av revision. Tidigare forskning tyder på att yrket är på väg att automatiseras, och i framtiden tror forskare att robotisering kommer vara aktuell, även inom revisionsbranschen. Med fokus på två olika frågeställningar; digitaliseringens påverkan på revisionsmetodiken och digitaliseringens påverkan på revisionskvaliteten, har en kvalitativt inriktad studie genomförts. Studien bygger på intervjuer med tolv olika revisorer och programutvecklare. Studien visar att digitaliseringen av revisionen har haft en stor påverkan på yrket. Framförallt har digitaliseringen påverkat möjligheten att hantera en större mängd data. Bland annat har revisionen gått från att tidigare arbetat med statistiska urval, till att idag fokusera mer på att analysera data. Genom nya dataanalysverktyg har det blivit möjligt för revisorerna att gå från stickprov till att granska hela populationen av data. Granskningen kan då bättre inriktas på områden som avviker, eller områden med större risk. Studien visar att förändringen har haft en positiv påverkan på revisionskvaliteten, bland annat därför att revisionsbevisen blivit mer relevanta och tillförlitliga, samt att risken för att revisorerna gör ett felaktigt uttalande minskat. Mer fokus läggs idag på att revisorerna ska förstå kundens verksamhet och de faktorer som kan påverka denna. Förändringen har gjort att revisorernas analytiska förmåga blivit allt viktigare för att klara av yrket. Utvecklingen har möjliggjort att revisorerna kan ge bättre rådgivning, vilket skapar nya möjligheter inom branschen. / The purpose of this study is to explain and understand the influence of digitalization on the audit. The auditing industry is today in a significant process of change, where traditional methods are replaced by more modern auditing techniques. Digitalization is said to be a strong driving force for this change, which has a great impact on the profession. Because customers have become more digital and that new digital audit tools have been developed, the possibility of a new type of audit is created. Previous studies show that the profession is about to be automated, and in the future, researchers believe that robotization will be relevant also in the auditing industry. Focusing on two different issues; the impact of digitization on the audit methodology, and the impact of digitization on audit quality, a qualitatively oriented study has been conducted. The study is based on interviews with twelve different auditors and program developers. The study shows that the digitization of the audit has had a major impact on the profession. In particular, digitization has affected the ability to handle a larger amount of data. Among other things, the audit has gone from having previously worked with a large number of samples to today instead focusing on analyzing data. Through new data analysis tools, it has become possible for the auditors to switch from sampling to reviewing the entire population of data. The audit can then focus on areas that deviate or areas with greater risk. The study shows that the change has had a positive impact on the audit quality, since the audit evidence has become both more relevant and reliable, and that the risk that the auditors make an incorrect statement has decreased. More focus is now being placed on the auditors being able to understand the customer's business and the things that can affect this. The change has meant that the auditors' analytical ability has become increasingly important in order to cope with the profession. The development has made it possible for the auditors to provide better advice, which creates new opportunities in the industry.

O propósito deste estudo é investigar os potenciais determinantes da qualidade das auditorias no Brasil. Seus determinantes foram definidos a partir da abordagem teórica oferecida pelo modelo de Arruñada (1997), expandido na dimensão de competência profissional dos auditores. Adicionalmente, no sentido de se testar, empiricamente, os determinantes da qualidade das auditorias realizadas nas empresas listadas na Bovespa no período de 1998 a 2008, um construto inédito (o Índice de Qualidade das Auditorias IQUA) foi desenvolvido. Os resultados alcançados sugeriram que a qualidade das auditorias é inferior quanto maior o conflito de agência entre controladores e não controladores e quanto maior o tempo de relacionamento contínuo entre o auditor e a entidade auditada. Adicionalmente, as evidências empíricas coletadas indicaram que as firmas de auditoria chamadas de Big-N, bem como os auditores especialistas nos segmentos de indústria de seus clientes, oferecem serviços de maior qualidade. / The aim of this research is to investigate the potential determinants of audit quality in Brazil. Such determinants were defined by using the theoretical perspective of Arruñadas (1997) model, expanded in the dimension of auditors professional competence. Furthermore, in order to empirically test the determinants of audit quality for Brazilian listed companies between 1998 and 2008, an original construct (Audit Quality Index IQUA) has been developed. Results from such tests suggest that audit quality is lower when agency conflicts between controlling and non-controlling shareholders are higher and when auditors tenure is higher. Moreover, evidence obtained from empirical testing indicated that the so-called Big-N audit firms, as well as specialized auditors, offer higher quality audit services to their clients.