Purpose – The purpose of this paper is to get an increased insight on a governmental regulator's view on independence in a Swedish context, with the aim to contribute to the research regarding auditor independence. Design/methodology/approach – The research is in the form of a quantitative study examining the Swedish Supervisory Board of Public Accountant’s disciplinary rulings from the years 2004-2010. Findings – The study concludes that the SSBPA view independence in fact as one, if not the most, important attribute for an auditor, while independence in appearance is on the other side of the spectrum, being one of the least vital. Originality/Value – The findings of this paper show that the SSBPA’s view on auditor independence is in stark contrast to the propositions made by the European Commission and SOX, as they are more focused on mitigating issues related to independence in appearance. Keywords – Auditor independence; Independence in Appearance; Independence in Fact; Practical Definition; Quality affecting Issues; Non-Quality affecting Issues; Regulatory Oversight; Disciplinary RulingsPaper Type – Research paper

Relationsmarknadsföring används allt mer av revisorer för att behålla klienter. Eftersom relationsmarknadsföring kan leda till vänskap och eftersom vänskap försvårar revisorns oberoende kan detta påverka hur revisorsyrket uppfattas. För bland annat kreditgivare är det viktigt att redovisningen fått en opartisk granskning och om inte ett oberoende föreligger kan detta potentiellt bli ett problem. Syftet med denna studie var att se om kreditgivare tror att revisorernas relationsmarknadsföring kan resultera i ett uppfattat försvagat oberoende. I den teoretiska referensramen tas olika teorier upp som hänger ihop med revision. Bland annat talas det om tankesättet profession-independence; uppfattningen om revisorers förmåga att arbeta oberoende. Metoden som användes var kvalitativ. Totalt sex professionella kreditgivare intervjuades, i sex separata intervjuer. Intervjuerna var öppna och semistrukturerade, de spelades in på diktafoner och renskrevs efteråt. Empirin visade att nästan alla kreditgivare hade samma uppfattning, att relationsmarknadsföringen inte är ett hot mot oberoendet. Det fanns flera faktorer som gav kreditgivarna förtroende för revisorerna och detta förtroende var så starkt att de inte trodde relationsmarknadsföringen skulle orsaka problem. Analysen som gjordes av inhämtade data är att de intervjuade kreditgivarna ser revisionen som försäkran, samt att relationsmarknadsföringen inte tros leda till förstört oberoende eftersom den vänskap som relationsmarknadsföringen kan generera inte tros ha effekter på oberoendet. Svaren från de intervjuade förknippades med tidigare teorier, inkluderandes teori kring revisionsarenan, och studien finner potential till möjlig utveckling av befintlig teori. Slutsatsen var att det framkommit indikationer på att relationsmarknadsföring inte kommer att skada revisorernas profession-independence och att detta går att härleda till tre faktorer: Upplevda mekanismer som förhindrar beroendeställning, Goda erfarenheter av revisorer och Eget behov av att agera i oberoende projiceras på revisorerna. Ytterligare förslag till framtida forskning presenterades.

Revisorns oberoende är sedan länge ett omdiskuterat ämne. Brist på oberoende har tidigare orsakat flera större företagsskandaler och lett till att allmänheten förlorat förtroende för revisionsprofessionen. Därefter har ett flertal förändringar skett genom att olika regleringar har införts, vilka bland annat har syftat till att stärka oberoendet. Syftet med denna studie är att förklara huruvida det finns ett samband mellan revisorers personlighetsdrag och deras förmåga att bibehålla oberoendet. Denna studie undersöker hypoteser som har skapats utifrån befintlig teori och har därmed en kvantitativ ansats. För att undersöka revisorers personlighetsdrag har femfaktormodellen använts, som består av fem olika dimensioner vilka undersöker en individs grundläggande personlighetsdrag. För att undersöka oberoendet har tre vinjettfrågor tillämpats. Vinjettfrågorna lyckades inte mäta graden av oberoende tillsammans och således bör studiens resultat tolkas med försiktighet.  Resultaten av denna studie indikerar att personlighetsdragen neuroticism, öppenhet för erfarenhet och vänlighet skulle kunna ha en påverkan på revisorers förmåga att bibehålla oberoendet. Sambanden som återfinns är emellertid svaga. Vidare återfinns inga samband mellan extraversion samt samvetsgrannhet och oberoendet, vilket talar för att personlighetsdragen påverkar oberoendet i mycket låg utsträckning. Slutligen är revisorers personlighetsdrag ett forskningsområde som kan vidareutvecklas. / The independence of the auditor is since a long time a debated topic. Lack of independence has earlier caused several major corporate scandals and led to the public losing trust in the audit profession. Afterwards, several changes have been made through implementation of various regulations which among other things aim to strengthen the independence. The purpose of this paper is to explain whether there is a relationship between auditors’ personality traits and their ability to remain independent. This study tests hypotheses which have been created through existing theory and thus, has a quantitative approach. To examine auditors’ personality traits, the five-factor model of personality traits has been used which consists of five dimensions that explain an individual's fundamental personality traits. To examine the independence, three vignette questions have been used. The vignette questions did not manage to measure the level of independence together and consequently, the study’s results need to be interpreted with caution.  The findings of the study indicate that the personality traits neuroticism, openness to new experience and agreeableness might have an impact on the auditors’ ability to maintain the independence. However, the found relationships are weak. Furthermore, no relationships can be found between extraversion, conscientiousness and the independence which suggests that personality traits affect the independence to a very low extent. Lastly, the auditors’ personality traits are a research area that can be further developed.

Fin 2001, début 2002, les États-Unis ont été frappés par un nombre élevé de scandales financiers. Plusieurs affaires ont été révélées par les médias, singulièrement le cas Enron. La reformulation de la profession d'audit en matière d'indépendance des auditeurs et des comités d'audit après le scandale Enron a cherché à garantir la crédibilité des états financiers. L'objectif de ce travail est de tester l'effet de la nouvelle formulation de la profession d'audit, notamment en matière d'indépendance des auditeurs et des comités d'audit, précisément sur la question de la crédibilité des états financiers. Trois objectifs opérationnels ont été traités dans le cadre de cette étude. Premièrement, nous avons analysé les effets de l’affaire Enron sur la réaction des marchés financiers, le choix des commissaires aux comptes et l’affermissement du conservatisme des auditeurs, dans le contexte français. Deuxièmement, nous avons étudié l’impact de l’institution du Haut Conseil du Commissariat aux Comptes sur l’indépendance des auditeurs. Finalement, nous avons étudié l’influence du Comité d’audit sur la crédibilité des états financiers après le rapport Bouton de 2002. Les résultats empiriques s’attachent à montrer que la présence d’un co-commissaire aux comptes Non-Big a minimisé l’effet négatif de la réaction du marché financier français lors de l’annonce du scandale Enron. Par contre, le scandale Enron n’a pas influencé significativement la perception des investisseurs institutionnels étrangers envers les services des grands cabinets d’audit. Ces derniers n’ont pas justifié la production d’une bonne qualité d’audit par rapport aux Non-Big. Pour rétablir la confiance sur les marchés financiers, le législateur français est intervenu via la création d’un organisme de supervision publique de la profession comptable intitulé le H3C. Les résultats empiriques montrent que la création du H3C a renforcé l’indépendance des auditeurs. Par contre, l’annonce du lancement des activités disciplinaires de ce nouvel organisme après 2005 n’a pas d’effet significatif sur l’indépendance des auditeurs. Par contre l’apparition du rapport Bouton en 2002, et la nouvelle dimension accordée au contrôle interne, montre que ce dernier dépendant des caractéristiques des comités d’audit notamment l’expertise et l’indépendance de leurs membres. / At the end of 2001, the scandal series was announced in the US context. Several scandals, especially the Eron failure, were revealed in the first stage by the media. The main purpose of this research is to study the impact of the new reform, in audit after Enron scandal, on auditor independence, audit comity and financial statement credibility. Three operational objectives have been treated in this study. First, we have analyzed the effects of Enron scandal on financial market reaction, auditor choice and auditor conservatism in the French context. Second, we have investigated the impact of the new reform on the auditor independence. Finally, we have examined the effect of audit committee on financial statement credibility after the adoption of the Bouton Report in 2002.The empirical results have shown that the presence of the Non-Big4 members in the legal audit process have minimized the negative effect of the reaction of the SBF 250. However, the perception of the foreign institutional investors has not changed significantly for the Big4 audit services. This auditor group (Big4) does not justify the production of the audit quality compared to other auditors in France. To restore confidence in the financial market, the French legislative authority has created the H3C. The empirical results have revealed that the establishment of the H3C has ameliorated the auditor independence. Hence, the announcement of the launch of H3C disciplinary activity after 2005 has not had a significant effect on auditor independence. In contrast, the appearance of the Bouton Report in 2002 and the reform related to the internal control depend on the audit committee characteristics (expertise and independence audit committee members).

Abstract The only observable outcome of the audit process is normally the issued audit report, which, at least in its standard form, does not contain much information about audit quality (Balsam et al. 2003). Auditor quality is multidimensional and inherently unobservable, and there is no single auditor characteristic that can be used as a proxy for it. In the absence of direct measures for quality, audit consumers must assess the quality by using quality surrogates, or the overall reputation of an auditor (e.g. Shapiro 1983, Riley 2001). The purpose of this dissertation is to enhance our understanding of the determinants and implications of quality-differentiated audits through four inter-related essays. The findings of the essays shed light on the various ways in which client firms strive to signal high audit and consequent earnings quality. From the supply-side perspective, the essays of this dissertation provide evidence how some (individual) auditors have been able to establish a reputation higher than the generic reputation. Importantly, this dissertation adds to the ongoing debate about the regulator changes and initiatives in the European Union and the U.S.A. requiring disclosure of engagement partner identity. The rationale behind such a requirement is that it could bring within investors’ reach greater transparency and accountability in the auditing process thereby helping to restore investor confidence in the capital markets. Consistent with this rationale, the results of this dissertation support the view that audit markets (and/or firm insiders) infer audit quality, at least to some extent, from the characteristics of the individual audit partner in charge.

Audit firm tenure impacts the quality of audit work and the disclosure of material internal control weaknesses. Public firms are required by the Sarbanes Oxley Act of 2002 (SOX) Section 302 to disclose material internal control weaknesses. Researchers debate whether audit firm rotation is necessary for improving audit quality (Chen, Lin, & Lin, 2008). Generally, an auditor needs sufficient time to become familiar with a client's business in order to enhance effective controls and financial reporting. However, long tenure may diminish auditor independence, and in turn reduce the quality of audit work and encourage a client to violate SOX disclosure requirements. Therefore, it is expected that the disclosure of material internal control weaknesses is less likely given long audit tenure. Prior studies consider many variables that impact the disclosure of control weaknesses, except audit tenure. Further, prior studies do not address the issue of whether familiarity or independence explains non-disclosure. This dissertation investigates the role of audit firm tenure and concludes that the disclosure of material internal control weaknesses is more likely given short tenure. Further, familiarity with the client's business, which is associated with long tenure, explains non-disclosure and not the lack of independence. Therefore, audit firm rotation may not be necessary.

The main task of an auditor is to review financial information and to ensure that the informationis reliable and trustworthy. In order for the users of financial information to trust theinformation they take part of it is a prerequisite that the auditor acts independently. Lately, theauditor’s independence has been questioned due to the numerous accounting scandals that havetaken place around the world. One measure to strengthen the quality of auditing and theauditor's independence was the introduction of mandatory firm rotation, which came into forcein Sweden in 2016. Whether or not the firm rotation has achieved its purpose has beendiscussed in previous research where both advantages and disadvantages have been reported.Although the subject has been discussed in previous research, there are currently few studiesin Sweden that focus on the auditor's perspective on the issue. The purpose of this study wasthus to explain the relationship between firm rotation and audit quality, and to examine howSwedish auditors feel that firm rotation affects audit quality. To achieve the purpose of thestudy, a qualitative research method was used in the form of semi-structured interviews witheight auditors. The result of the study shows that no factual change in the independence nor theaudit quality has been obtained, yet the Swedish auditors still feel that the audit quality is higherdue to the firm rotation rules since they have increased the independence in appearance. / Revisorns huvudsakliga uppgift är att granska finansiell information och säkerställa attinformationen är tillförlitlig och trovärdig. Att revisorn agerar oberoende i sin granskning ären viktig förutsättning för att säkerställa att informationen är tillförlitlig. På senare tid harrevisorns oberoende dock ifrågasatts på grund av de flertal redovisningsskandaler som ägt rumrunt om i världen. En åtgärd för att stärka revisionskvaliteten och revisorns oberoende varinförandet av obligatorisk byrårotation som trädde i kraft i Sverige år 2016. Huruvidabyrårotationen har uppnått sitt syfte eller ej har varit omdiskuterat i tidigare forskning där bådeför- och nackdelar redovisats. Trots att ämnet är omdiskuterat i tidigare forskning finns det idagfå studier i Sverige som belyser revisorns perspektiv i frågan. Syftet med studien var därmedatt förklara relationen mellan byrårotation och revisionskvalitet, samt att undersöka hursvenska revisorer upplever att byrårotationen påverkar revisionskvaliteten. För att uppnåstudiens syfte användes en kvalitativ forskningsmetod i form av semistrukturerade intervjuermed åtta revisorer. Resultatet från studien visar att någon faktisk påverkan på oberoendet ellerrevisionskvaliteten inte skett men att revisorerna anser att kvaliteten ökat ändå eftersom detsynbara oberoendet ökat hos allmänheten.

Bakgrund och problemdiskussion: Flertalet internationella och nationella kriser har skakat om revisionsvärlden till följd av att revisorn inte alltid har agerat oberoende. En betydande faktor som kan påverka revisorns oberoende är relationen mellan revisorn och klientföretaget. Utifrån tidigare forskning finns det ett behov av att studera revisorns oberoende på mindre revisionsbyråer genom att titta på relationen ur både revisorns och klientföretagets perspektiv. För att skapa en djupare förståelse för relationen kommer den sociala identitetsteorin att användas. Teorin innebär att en gemensam identiteten kan uppstå till följd av att revisorn och klientföretaget spelar inom samma sociala kontext. Syfte: Syftet med uppsatsen är att bidra till en fördjupad förståelse för revisorns oberoende, med ett särskilt fokus på relationen mellan revisorer på mindre revisionsbyråer och deras klientföretag. Metod: Uppsatsen utgår från en deduktiv forskningsansats och en kvalitativ forskningsstrategi. Semistrukturerade intervjuer har använts för att samla in uppsatsens empiriska material där komparativ design har använts som forskningsdesign. Analysen av det empiriska materialet har utgått från en tematisk analys. Slutsats: Uppsatsen visar på att klientföretagen har andra förväntningar på revisorn än vad revisorn möjligen kan prestera. Dessutom utför revisorer uppgifter som kan stå i strid med analysmodellen. Revisorn och klientföretaget kan identifiera sig med varandra eftersom de befinner sig i samma sociala kontext. Relationen mellan revisorn och klientföretaget kan ses vara mer komplex än vad man tänker sig, varför revisorns oberoende ibland kan ifrågasättas till följd av relationen. / Background and problem discussion: Several international and national crises have shaken the audit world because of the auditor not always acting independent. A significant factor that may affect the auditor's independence is the relation between the auditor and the client company. Based on previous research, there is a need to study the auditor’s independence at smaller accounting firms by looking at the relation from the perspective of both the auditor and the client company. To create a deeper understanding of the relation, the social identity theory will be used. The theory means that a common identity can arise because of the auditor and the client company playing within the same social context. Purpose: The purpose of this thesis is to contribute to a deeper understanding of auditor independence, with a particular focus on the relationship between auditors at smaller audit firms and their client companies. Method: This thesis is based on deductive research approach and a qualitative research strategy. Semi-structured interviews have been used to collect the thesis’s empirical material where comparative design has been used as research design. The analysis of the empirical material has been based on a thematic analysis. Conclusion: This thesis shows that the client companies have different expectations of the auditor than what the auditor can perform. In addition, the auditors perform tasks that may conflict the analysis model. The auditor and the client company can identify with each other because they are in the same social context. The relationship between the auditor and the client company can be seen as more complex than imagined, which is why the auditor's independence can sometimes be questioned because of the relationship.

Auditor independence is a well-discussed topic. Previous research shows that it is difficult to know where to draw the line of independence and highlights several factors that affect the auditor's independence in a negative direction. However, there is a lack of studies on how auditors' independence is affected by being active in a smaller city. The purpose of this study was therefore to increase the understanding of how auditors' independence is affected by operating in smaller cities. To achieve the aim, a qualitative method has been used, in the form of semi-structured interviews with accountants operating in smaller cities. The results of the study show that there are certain problems with being an active accountant in a small town. It can be stated that the familiarity threat is more tangible, which is natural as relationships and contact networks become more intertwined. However, this does not mean that the auditors compromise their independence, but it requires higher demands on the individual auditor's morals and integrity in his professional role in order to withstand threats and pressure. Threats of self-interest and threats of self-review were also threats that increased in the smaller city. However, these threats could be counteracted through implemented procedures, which resulted in these threats not being considered to affect the auditors' independence. Something that was considered to strengthen independence was the awareness of the importance of maintaining a good reputation and trust in the smaller city.

Background: Research has shown that the risk of material misstatements increases during exogenous risk shocks. Simultaneously, auditors shall identify and assess the emergent risks. During the GFC, auditors' response was considered satisfactory by some but criticized byothers. Covid-19 presents a new exogenous risk shock which should entail a similar response by auditors. Purpose: The purpose of this study is to determine the effect that exogenous risks during uncertain economic times have on the risk- and materiality assessments of auditors. Further, to determine if auditor independence and trait scepticism affect the relationship between exogenous risk and risk- and materiality assessments. Methodology: This study used a quantitative method by sending out questionnaires to Swedish authorized and approved auditors. The answers were analysed through Spearman correlation matrixes, Paired-samples T-tests, Ordinary Least Squares (OLS) regressions and a binary logistics regression. This study is based on a positivistic perspective and a deductive approach was used. Conclusion: The findings indicated that auditors did make more conservative risk assessments in response to the Covid-19 pandemic. However, they did not adjust the materiality assessments nor performance materiality assessments significantly. Moreover, that the individually situated factors of auditors had impact on the assessments during the pandemic.