Enforcement of financial reporting has gained new momentum in the European Union (EU) due to the so-called ‘IAS Regulation‘ (Regulation (EC) No. 1606/2002), with recital 16 requiring EU member states to take appropriate actions to ensure compliance with international accounting standards. Accordingly, several EU member states took concurrent or subsequent measures to increase the level of accounting enforcement, either by establishing new enforcement institutions, or by reforming existing ones. While these actions are designed to enhance accounting compliance by unfolding a preventive and sanctioning function of enforcement, a thorough literature review reveals that there is only scarce empirical evidence on whether this aim has been indeed achieved. Striving to shed light on the impact of recent enforcement reforms, this dissertation examines the sanctioning function in the German enforcement system by investigating shareholder reactions to error announcements. Moreover, a cross-country analysis of 20 EU member states provides novel insights on the postulated preventive function in the aftermath of enforcement reforms. In summary, this dissertation aims to improve the understanding of the economic impact of accounting enforcement in Germany and the EU.:I. Does Enforcement of Financial Reporting Matter? Empirical Evidence from Germany and Europe – Overview of the Dissertation 1 Introduction to the Research Context 2 Overview and Findings of the Manuscripts II. Enforcement of Financial Reporting – A Corporate Governance Perspective 1 Introduction 2 Theoretical Background 3 Identification and Description of Relevant Literature 4 Critical Discussion 5 Conclusion and Limitations III. Determinants of Investor Reactions to Error Announcements – Extended Evidence from Germany 1 Introduction 2 The German Enforcement System 3 Previous Research and Hypotheses Development 4 Methodology 5 Results 6 Robustness Tests 7 Conclusion IV. Error Announcements, Auditor Turnover, and Earnings Management – Evidence from Germany 1 Introduction 2 Institutional Background: The German Enforcement System 3 Previous Research and Hypotheses Development 4 Methodology 5 Results 6 Robustness Tests 7 Conclusion V. Does Enforcement Change Earnings Management Behavior? Evidence from the EU after Mandatory IFRS Adoption 1 Introduction 2 The Development of National Enforcement Institutions in the EU 3 Related Literature and Hypothesis Development 4 Research Design and Data Description 5 Results 6 Additional Analyses and Robustness Tests 7 Conclusion

Bakgrund: Revisionsplikten avskaffades i syfte att minska den administrativa kostnaden, stärka bolagens konkurrenskraft samt tillväxtmöjligheter för små aktiebolag. Sedan år 2010 har revisionen blivit frivilligt för företag som uppfyller vissa kriterier. Följaktligen har reformen lett till att flera företag inte längre kunde upprätthålla redovisningskvalité. Syfte: Syftet med studien är att bidra med kunskap om hur små aktiebolag upprätthålla en god redovisningskvalité trots att de har valt bort revisionen. Kunskapen kommer skapas genom att förklara effekten av den frivilliga revisionen på redovisningskvalitéten, för att vidare bidra med kunskap åt små aktiebolag som inte vill anlita revisorer. Metod: I studien har kvalitativ metod tillämpats genom användning av semistrukturerade intervjuer med auktoriserade och godkända revisorer. Resultat & Analys: Revisorer menade att många företag inte förstår vikten av att behålla revisionen samt ser det som en kostnadsbelastning. Vidare menar revisorer för att behålla god redovisningskvalité är det viktigt med intern kompetens och externa redovisningstjänster. Studien påvisar att små aktiebolag kan utöver revision upprätthålla en god redovisningskvalité med hjälp av redovisningskonsulter samt interna kompetens tillsammans med bokföringsprogram. Utifrån studien har det klargjorts för små aktiebolagsägare att god redovisningskvalité kan uppnås med andra externa och interna tjänster än revisionen. / Background: The audit duty was abolished with the aim of reducing administrative costs, strengthening companies' competitiveness and growth opportunities for small limited companies. Since 2010, the audit has become voluntary for companies that meet certain criteria. Consequently, the reform has led to several companies no longer being able to maintain accounting quality. Purpose: The purpose of the study is to contribute with knowledge about how small limited companies can still maintain a good accounting quality even though they have opted out of the audit. The knowledge will be created by explaining the effect of the voluntary audit on accounting quality, in order to further contribute knowledge to small limited companies that do not want to hire auditors. Method: In the study, qualitative method has been applied through the use of semi-structured interviews with authorized and approved accountants. Results & Analysis: Auditors said that many companies do not understand the importance of maintaining the audit and see it as a cost burden. Furthermore, accountants believe that in order to maintain good accounting quality, it is important to have internal competence and external accounting services. The study shows that small limited companies can, in addition to auditing, maintain a good accounting quality with the help of accounting consultants and internal competence together with accounting software. Based on the study, it has been made clear to the owners of small limited companies that good accounting quality can be achieved with external and internal services other than the audit.