The purpose of this dissertation is to explore the influences of industry dynamic factors (e.g., peer selections) on a client’s subsequent decision to select the type of auditor (e.g., Big N versus non-Big N), following auditor turnover. More specifically, drawing on social norms and social learning theories, I develop testable implications and investigate whether and how industry dynamics have an incremental power in explaining auditor choice beyond traditional firm-specific variables documented in prior research. Using a large sample from years 1988 – 2012, I find that clients are more likely to imitate their industry peers’ prior selections to select the type of their succeeding auditors, consistent with the implications of social learning theory. I also find that clients in industries with stronger industry norms, as measured by a greater proportion of clients audited by Big N auditors in an industry, are more likely to select Big N auditors as their succeeding auditors, consistent with the implications of social norms theory. To my best knowledge, this is the first study to explore the impact of social dynamics measured at the industry level on auditor selection and provide large-sample evidence on the relations between industry dynamics and auditor selection at the firm level. Findings of this study provide insights into the dynamic process of auditor selection in which companies do not make auditor-selection decisions in isolation of one another as often posited in existing literature, contribute to the research on the determinants of auditor choice by incorporating industry dynamics into an agent-principal model, and provide a more comprehensive view of the phenomenon of auditor selection.

Client inquiry is a fundamental procedure for gathering audit evidence. Since inquiries are not audio- or video-recorded in practice, auditor memory is vital to the accuracy of evidence gathered in this manner. Due to the potential for error during memory encoding and retrieval, the effect of memory on judgment, and the cognitive complexity of conducting a face-to-face inquiry, examining factors affecting auditor memory of client inquiries is important. In this dissertation, I examine two factors likely to affect auditor memory of a client inquiry. First, encoding style is a low-level cognitive function representing how much stimuli an individual perceives before applying prior knowledge (schemata) to assist with encoding to long-term memory, affecting information noticed and remembered. Differences in auditors’ encoding style may explain variance in memory accuracy of evidence gathered from a client inquiry. Second, audit professionals often make hand-written or typed notes during client inquiries, and subsequently review the notes, which may affect memory. To address these issues, I first gather interview evidence from six professional auditors to determine how practicing auditors plan, prepare for, conduct, and document evidence from client inquiries. I then develop and execute a video-based experiment with 33 senior auditor participants, 23 masters-level accounting students, and 47 undergraduate-level accounting students to investigate whether encoding style and note taking affect auditor memory accuracy of, and audit judgments resulting from, a client inquiry. I find multiple significant results. First, I find that encoding style affects memory accuracy such that auditors quickly utilizing prior knowledge during an inquiry results in greater memory accuracy than auditors slowly utilizing prior knowledge. This finding suggests that quickly utilizing prior knowledge helps auditors to manage the cognitive complexity of a client inquiry. Second, I find that participants who take notes during an inquiry, and subsequently review his or her notes taken, have lesser memory accuracy than participants who do not take notes. This finding suggests note taking distracts participants during an inquiry, hindering memory accuracy. Third, I find that memory accuracy affects audit judgments such that memory accuracy is positively related to judging the client’s explanation as reasonable, and negatively related to judging the probability of material misstatement and likelihood to increase substantive testing. Finally, I find that encoding style has a significant indirect effect on audit judgment through memory accuracy. This study makes several contributions to audit practice and academic literature. First, this study contributes a discussion of how auditors conduct client inquiries based on interviews with very-experienced auditors from multiple accounting firms, representing various firm sizes. No prior research provides qualitative evidence of how auditors conduct inquiries. Second, this study contributes to the audit literature by finding that encoding style and note taking affect auditor memory accuracy of a client inquiry. Although the findings do not support hypotheses suggested by theory, the findings suggest further research in the topic is warranted. Third, this study contributes to the psychology literature by finding that encoding style affects memory in an information-robust, professional context, extending the generalizability of the encoding style construct beyond the abstract tasks with which it has been previously examined.

Artificial Intelligence (AI) is reshaping how businesses, governments, organizations and individuals operate. Most businesses are now moving away from traditional systems of operation into employing and leveraging on technologies like AI to deliver superior goods and services to their clients. Today, there are calls for a shift from the traditional auditing techniques of sampling to the use of advanced technology with the capability to analyze all the operating activities of a business to improve audit quality. There is no better time for auditing to merge with AI than now as it is increasingly becoming too challenging for human auditors to analyze huge volumes of structured and unstructured data in various locations to gain the relevant financial and non-financial information that they may need to form their opinions. The purpose of this research was to examine the impact of AI on auditors’ skills and competencies, audit process and audit quality. The researchers used the qualitative research methodology and reviewed literature to identify gaps in the literature. Participants (practicing auditors) were interviewed to gather data for analysis. The findings from the empirical data concludes that AI has had a significant impact on auditors’ skills and competencies, with many respondents affirming that the core skills now needed by auditors is IT skills. Audit process and audit quality have also been positively affected by AI.

Since the outbreak of the Covid-19 pandemic in early 2020, many Swedish auditors have been forced to work fulltime from home. If auditors are negatively impacted working from home, it could result in auditors engaging in reduced audit quality (RAQ) behavior and negatively impact overall audit quality. Working from home to this extent is a new phenomenon, and thus, there is a need to further research the effects on auditors.  In this thesis, the factors influencing RAQ behavior are theorized based on the Job Demand-Control-Support (JDCS) model. This thesis examines how auditors with high home demands perceive time pressure, workload, and work-life balance to be affected when working from home and how it affects their propensity to engage in RAQ behavior. Furthermore, this thesis aims to examine if there are gender differences in auditors’ perceptions regarding these factors. In this thesis, high home demands mean having at least one child under the age of twelve. Data was collected using a qualitative method and conducting 14 interviews on how the auditors perceive the factors influencing RAQ behavior have been affected while working from home. The result of the thesis indicates that the propensity of auditors engaging in RAQ behavior is decreased when auditors with high home demands are working from home. Also, the results indicate that both male and female auditors with high home demands enjoy working from home and that there has been a decreased propensity to engage in RAQ behavior. This thesis highlights how the propensity of auditors with high home demands engaging in RAQ can be reduced, contributing to overall higher audit quality.

Digitization has fundamentally changed the auditing profession. Audits are now performed using digital systems and tools that have revolutionized the audit process. Digitization has created opportunities to carry out a simplified audit process by simplifying the working method. For the leading audit firms, it is a basic precondition to adopt the digital tools in order to maintain competitiveness. This study aims to investigate and describe how digitalisation has changed the working methods of the audit process at the leading audit firms. The question asked in the study is how it has changed and what will be investigated is which working methods have changed and what the change has been. The study is characterized by aqualitative research approach in which eight semi-structured interviews were conducted, which together with the study's theoretical frame of reference form the basis for the study's produced results. Previous research states that working methods have changed and that this is the basis for the revision process, thus surveys are carried out with the results as a basis for ensuring the previous research. The results indicate that the audit process has been facilitated with the help of the digital tools that the audit firms' IT department works with to design. The working methods have changed because the auditor, with the help of digital tools and systems, has been given a different communication system and the handling of data has been facilitated. The result of the digitization also frees up time for the auditor, who devotes more value-creating time to the client, which may involve work as an advisor

I den här studien har vi undersökt revisorers uppfattning av hur trovärdighållbarhetsbestyrkandeprocessen är. Målet med studien har även varit att undersöka framgångsfaktorer för ett trovärdigt bestyrkande och relevansen avhållbarhetsredovisning inom finanssektorn. Studien har genomförts genom intervjuer med respondenter om bestyrkandeprocessen och granskning avhållbarhetsredovisningar. Datamaterialet från intervjuerna och studiens referensram har granskats genom en dokumentanalys där två företag inom den finansiella sektorns hållbarhetsredovisningar har analyserats. Vi har även analyserat vilka standarder företagen använt vid upprättande av hållbarhetsredovisningen, där Swedbank använde GRI och ÅRL och Svea Bank använde ÅRL. Vi finner att revisorers uppfattning om hållbarhetsbestyrkandeprocessen är att den är mindre trovärdig än bestyrkandeprocessen för finansiella redovisningar. Dessutom finner vi flera olika framgångsfaktorer för en trovärdig bestyrkandeprocess där en pålitlig intern kontroll och en omfattande extern granskning är väsentlig. Hållbarhetsredovisning är relevant för finanssektorn däremot kunde vi inte finna i vilken utsträckning den är relevant. Vidare forskning om hållbarhetsredovisning och tillhörande bestyrkanden efterfrågas eftersom förståelsen är begränsad. / In this study we have investigated the auditors perception of how trustworthy the process of assurance is. The aim of the study has also been to investigate the success factors for a trustworthy assurance statement, and how relevant sustainability reporting is within the financial sector. The study has been conducted through interviews with respondents about the assurance process and analysis of sustainability reports. The data from the interviews and the study's frame of reference have been examined through a document analysis where two financial sector companies' sustainability reports have been analyzed. We have also analyzed the standards the companies used when establishing the sustainability reports, where Swedbank used GRI and ÅRL and Svea Bank usedÅRL. We concluded that the auditors found the assurance process of sustainability reports to be less credible than the assurance process for financial reports. We also found different success factors for a trustworthy assurance process where a reliable internal control and an extensive external assurance were essential. Sustainability reporting is relevant for the financial sector, however we could not determine to what extent it’s relevant. In addition, further research on sustainability reporting and associated assurance are requested as the understanding is limited.

Auditing literature recently identified what has been termed a "social mismatch" between novice auditors and older, more experienced, more knowledgeable client contacts (Bennett and Hatfield 2013). This phenomenon occurs when novice auditors avoid face-to-face interactions with clients and can adversely affect the audit process. In light of the importance of novice auditor-client interactions, I conduct an experiment to identify potential mechanisms to mitigate the social mismatch phenomenon. Specifically, accounting students proxying for novice auditors are randomly assigned to experimental conditions in which they participate in role-play and perspective-taking exercises and complete an audit task commonly performed by novice auditors. Initial findings indicate that role-play interventions, such as those currently used in training at large public accounting firms, may exacerbate novice auditor inhibition tendencies. Furthermore, additional results suggest that actively taking the client's perspective prior to choosing an evidence gathering technique does not improve novice auditor decisions. Finally, auditor inherent characteristics are studied, including levels of emotional intelligence and impression management, and also do not appear to have implications for selection of evidence gathering techniques. Results of this study provide valuable insight into novice auditor-client interactions, as well as the implications of such interactions for audit evidence gathering activities. / Ph. D.

Background: For the last decade, the Swedish audit industry has experienced a turnover problem as there is a steady decline in authorized auditors. Furthermore, studies shows that more than half of the entry-level auditors leave the profession within the first three years of employment.  Purpose: The purpose of this thesis is to examine the impact professional identity and organizational identity has on job satisfaction among entry-level auditors. In addition to that, to investigate the impact job satisfaction has on job performance.  Methodology: This study adopts a positivistic perspective of research philosophy and employs a deductive approach, using a quantitative method. A survey was distributed to Swedish entry-level auditors who have worked within the profession for a maximum of three years. The collected data were analyzed through a Pearson Correlation matrix and multiple regression analysis. Findings: When studying the combined effect of organizational identity and professional identity on job satisfaction, the findings show that organizational identity has a positive impact on job satisfaction while professional identity do not. Furthermore, the findings show that job satisfaction has a positive impact on job performance.

Bakgrund och problem: I dagens samhälle spelar varumärken en viktig roll. När det kommer till värdering av varumärken saknas en gemensam och etablerad metod som är användbar i praktiken. Detta beror på att varumärkesvärdering är mycket komplext och innefattar en stor risk för felaktigheter. Det är upp till värderaren att välja ut den värderingsmetod som är lämpligast för att nå en korrekt och tillförlitlig värdering. Därmed kommer värderingsprocessen att skilja sig mellan olika aktörer och det kan därmed uppstå värdeskillnader i den slutgiltiga värderingen beroende på vem som utför värderingen av varumärket. Syfte: Studien syftar till att bidra med fördjupad förståelse för revisorers och värderingsexperters varumärkesvärderingar och om det finns eventuella skillnader mellan dessa aktörer. Arbetet kommer att jämföra aktörernas värderingsprocesser och studera om den slutliga värderingen skiljer sig åt beroende på vem som utför värderingen samt beroende på vilken metod som används. Metod: För att uppnå syftet har vi använt oss av en deduktiv forskningsansats och tillämpat ett kvalitativt tillvägagångssätt. Empirin är insamlad genom intervjuer av semistrukturerad form och utförda med revisorer och experter som har erfarenhet av varumärkesvärdering och är kunniga inom området. Slutsats: Efter att aktörernas värderingsprocesser analyserats och jämförts går det att se både likheter och skillnader. Samtliga respondenter tillämpar nästan uteslutande samma metod, Relief from Royalty-metoden. Studien visar att samtliga respondenter är enade om att värdeskillnader kan uppstå beroende på vem som utfört värderingen, vilken metod som använts samt eftersom varumärkesvärdering bygger på subjektiva bedömningar. / Background and problem: In today's society, brands play an important role. When it comes to the valuation of brands, there is a lack of a common and established method that is useful in practice. This is because brand valuation is very complex and involves a high risk of inaccuracies. It is up to the valuer to select the valuation method that is most suitable to reach a correct and reliable valuation. As a result, the valuation process will differ between different actors and value differences may therefore arise in the final valuation depending on who performs the valuation of the brand. Purpose: The study aims to increase the understanding of auditors and experts brand valuations and whether there are any differences between the actors. The paper will compare the actors valuation processes and study whether the final valuation differs depending on who performs the valuation and depending on which method is used. Method: To achieve the purpose, we have used a deductive research approach and applied a qualitative method. The empirical findings are gathered through semistructured interviews conducted with accountants and experts who have experience in brand valuation and are knowledgeable in the field. Conclusion: After an analysis and comparison of the actors valuation processes it is possible to discern both similarities and differences. All respondents apply almost exclusively the same method, the Relief from Royalty-method. The study shows that all respondents agree that value differences can arise depending on who did the valuation, which method is used and because brand valuation is based on subjective assessments.

Revisorns roll har på senare tid kommit att innefatta mer än att säkerställa de finansiella talensriktighet. En stor del av revisorns arbetsuppgifter handlar om att tillstå sina klienter med alltyp av rådgivning. En följd av revisorns utökade arbetsuppgifter är att det ställer krav pårevisorn att inneha kunskap om en rad olika ämnen. Denna utveckling har kommit attinnebära att allmänheten anses ha höga förväntningar på revisorn i dess yrkesroll.Tidigare forskning visar att bedrägerier inom organisationer har ökat på senare tid och att dethar kommit att bli ett ökat problem i samhället. I och med indikationer på att bedrägerier iorganisationer har ökat anses allmänheten också ha förväntningar på att revisorn skallupptäcka bedrägerier när de utför revision. Revisorerna själva anser däremot inte att det är ettsyfte med revisionen att upptäcka eventuella bedrägerier. Forskare menar dock attallmänhetens förväntningar är så pass höga att revisorerna måste ta hänsyn till detta krav.Tidigare forskning samt de tillfrågade revisorerna bekräftar att bedrägerier i företag är mycketproblematiska att upptäcka med hänsyn till det faktum att de inte enskilt har någon storpåverkan på de finansiella räkenskaperna för ett bolag.Meningsskiljaktigheter råder mellan revisorerna och användarna kring revisorns roll och bådetidigare forskning samt de revisorer jag har intervjuat i denna studie vittnar om att det råderett förväntningsgap mellan de olika parterna. En vanlig missuppfattning menar revisorerna imin undersökning är att allmänheten tror att revisorerna reviderar och kontrollerar pådetaljnivå. I både tidigare forskning samt empiriskt underlag finner jag uppfattningen attkunskapen kring revisorns roll måste öka. Tidigare forskning och de tillfrågaderespondenterna är överens om att information är huvudnyckeln till att minska deförväntningsgap som råder och som från revisorernas sida uppfattas som mycket olyckligt.Studien har gjorts i syfte att med kvalitativa semistrukturerade intervjuer med revisorerklargöra hur revisorerna själva ser på sin roll att upptäcka bedrägerier i organisationer.Studien består sammanlagt av åtta respondenter representerade på fyra revisionsbyråer varavtre stycken är stora revisionsbolag och en mindre revisionsbyrå. Resultatet av denna studievisar att revisorerna är överens om att upptäcka bedrägerier inte är ett huvudmål medrevisionen utan utgör endast en del. Revisorerna i studien menar att det är deras uppgift attgranska utifrån väsentlighet och risk. Samtliga respondenter menar att det är ledningensansvar att upptäcka bedrägerier men framförallt betonar de vikten av att förebyggabedrägerier med hjälpa av goda interna kontroller. / Program: Civilekonomprogrammet