The objective of IAS 36 is to guide a company on how to apply procedures to ensure that its assets are carried at no more than their recoverable amount. The standard IAS 36 is however obscure and full of gaps to be filled with assumptions made by the CFO. Considering the obscurity of IAS 36, the audit of goodwill impairment tests and possible write downs can have different outcomes depending on the relationship between the auditor and CFO. This paper contributes to the literature by investigating how the auditor-CFO relationship influences the audit of goodwill impairment tests and possible write downs. The primary data consist of eight semi-structured interviews with four auditor-CFO pairs, in four Swedish listed companies. The auditor- CFO relationship and related negotiations are found to highly influence the audit of goodwill impairment tests and possible write downs. The findings indicate that the respondents view the auditor-CFO relationship as being proactive. Depending on what role the auditor is ascribed in the relationship by the CFO, the goodwill impairment tests and possible write downs have a different outcome, where optimistic values of the impairment tests are either upheld by implementation of relevant strategies or write downs are conducted.

With increasing scrutiny over standards of financial statement transparency, this paper attempts to resolve misconceptions about effects of negative special items on future earnings. Value investor Benjamin Graham advises students to avoid firms that consistently post special items, because it is indicative of the volatility of the business. Using panel data from 2003 to 2014 and a regression structure used by Burghstaler et al. (2002), I find in contrast to Graham’s warning, that negative special items significantly increase earnings in the four quarters following its occurrence. Furthermore, I analyze results by sector and find that negative special items in the Information Technology sector have the most dramatic positive effects on future earnings. This study gives investors more insight as to what negative special items mean for future earnings of a company.

Big bath accounting är en strategi där beslutsfattarna i ett företag manipulerar det redovisade resultatet efter ens egna preferenser, ofta för att påverka resultatet negativt genom nedskrivning av immateriella tillgångar. Tidigare forskning har visat att fenomenet uppstår mer frekvent i samband med en nytillsatt VD.Uppsatsen syftar till att undersöka förekomsten av Big bath genom nedskrivning av goodwill bland börsnoterade bolag i Sverige, och ifall en nytillsatt VD kan vara en av förklaringarna till fenomenet. Studien har en deduktiv ansats och studiens frågeställningar har analyserats med hjälp av en kvantitativ dataanalys.Studiens insamlade data har hämtats ifrån företagens årsredovisningar under tidsperioden år 2005-2013. Den insamlade datan ligger till grund för de statistiska testerna som utförts. Resultatet visar att det finns ett samband mellan goodwillnedskrivningar och en nytillsatt VD samt goodwillnedskrivningar och ett negativt resultat. Vidare upptäcks ett positivt samband mellan Big bath och en nytillsatt VD samt Big bath och ett negativt resultat vilket tyder på att strategin existerar på Stockholmsbörsen. / Big bath accounting is a strategy where the decision makers of a company manipulates the stated result according to their own preferences, most often to influence the result negatively by writing down its intangible assets. Earlier studies have shown that this phenomenon occurs more frequently in connection with a newly appointed CEO.This paper aims to investigate the occurrence of Big bath by writing down goodwill among public companies in Sweden, and to investigate if a newly appointed CEO could be one of the explanations to this phenomenon. This study has a deductive approach and the research questions have been analyzed with a quantitative data analysis.The data in this study have been collected from the companies financial statements during the time period between 2005-2013. The collected data have been used for the statistical tests that this paper contains. The result shows a positive connection between writing down goodwill and a newly appointed CEO and also between writing down goodwill and a negative result. Furthermore, a positive connection was found between Big bath and a newly appointed CEO and also between Big bath and a negative result which indicates that this strategy exists on the Stockholm stock exchange.The essay is written in Swedish.