Previous research noticed a conflict between audit quality and efficiency that has been discussed when applying International Standards on Auditing (ISAs) in the audit of small and medium-sized enterprises (SMEs). However, there is a lack of research that concerns ISAs affect on audit quality and efficiency in the same study. Hence, the following research question was formulated: How has the implementation of International Standards on Auditing in Sweden affected audit quality and efficiency in the audit of small and medium-sized enterprises? Based on the perceptions of the interviewees, the implementation of ISAs has resulted in clearer risk assessment and increased use of analytical procedures, thereby improved audit quality. Further, ISAs have increased the hours spent on internal control, which impair audit efficiency since this activity is not judged as important when gathering audit evidence. This conflict between audit quality and efficiency is mostly explained by the shall requirements of ISAs since many of these are not applicable in the audit of SMEs. Our findings indicate a need to adapt ISAs and to allow deviations from shall requirements. The outcome would be that ISAs are closer to fulfil their aim in the audit of SMEs, which is higher audit quality without the loss of efficiency.

This dissertation examines the effect of accountability and client risk on auditor efficiency and effectiveness during an audit review task. I considered two types of accountability. The first type is outcome accountability, which represents the type of accountability in the current audit review process. The second type of accountability is process accountability, which is not currently utilized in the audit review process. I also examined two levels of client risk (high and low) because client risk has been shown to impact efficiency and effectiveness of the audit review process. An internet-based experimental instrument was utilized for this study. Participants were practicing auditors. Findings indicate that process accountability improved performance by exhibiting both an increase in identification of errors and a decrease in likelihood of agreement with the preparer. Findings also show that process accountability decreases efficiency by increasing overall time to complete the study and the amount of information reviewed. These results suggest that process accountability, the act of documenting the process used to perform a task, may reduce the chances of audit failure, making the reduction in efficiency acceptable. I also find that participants in the process accountability and high risk groups may have experienced information overload. Both high client risk and process accountability have been shown to increase attention to information and time spent on a task. A decrease in errors identified by individuals in this group when compared to individuals in the process accountability and low risk group may indicate information overload. Also, attrition rates and followup responses from participants who did not complete the study indicate that information overload may have been an issue for participants in the process accountability/high risk group. / Ph. D.

This dissertation examined the effects of interruption on auditor efficiency and effectiveness for one simple and two complex tasks within the audit domain. I evaluated these effects for novice and experienced auditors. In addition, I considered two ways in which the negative effects of interruption might be mitigated: varying an individual's interruption response strategy (immediate vs. negotiated) and the presence or absence of a memory-aid (notes). I investigated these phenomena using an internet-based experimental instrument. Subjects included both students and practicing auditors. My findings indicate that interruption hindered performance on certain complex audit tasks, and that it differentially affected auditor performance at two levels of experience. When interrupted, inexperienced auditors completed complex audit tasks less efficiently; experienced auditors completed them less effectively. In addition, experienced auditors who negotiated interruption completed a complex audit task more efficiently and effectively than those that responded to the interruption immediately. Furthermore, note-taking increased experienced auditor task efficiency on a complex audit task requiring judgment. These results suggest that auditors should limit task interruption when they are engaged in complex audit tasks. When task interruption cannot be avoided, auditors should consider negotiating a delay in the onset of an interruption. Finally, auditors who are interrupted while they complete a complex task requiring judgment should consider using notes to mitigate the deleterious effect of interruption on task efficiency. Participants also completed a post-experimental questionnaire which provided evidence about interruptions in the audit environment. The responses confirmed that auditors are frequently interrupted in practice. In addition, auditors preferred differing interruption response strategies dependent upon both the level of primary task complexity (easy vs. difficult), and the medium through which the interruption occurred (electronic vs. interpersonal). They chose interruption response strategies according to their place in the social hierarchy relative to the interrupter (client/boss vs. subordinate /friends/family). Finally, I found that interruption influences affect. Auditors reported significantly more positive affect reactions to interruption on easy tasks (e.g., alert, cheerful, friendly, happy and relaxed) and substantially negative affect reactions to interruption on difficult tasks (e.g., angry, hostile, irritated, nervous and tense). / Ph. D.

I examine factors influencing accounting firms' and their clients' decisions to pursue an auditing vs. consulting relationship. I employ the Sarbanes Oxley Act (SOX) prohibition on providing both services to the same clients as a natural experiment. Because Deloitte & Touche was the only Big 4 firm to retain its consulting division post-SOX, I compare Deloitte's client switch and retention decisions to those made by its direct competitors. In this context, I investigate how the decision to continue or terminate an audit relationship is influenced by auditor industry specialization, the historical provision of auditor-provided consulting services and the likelihood that the client will require consulting services in the future. I find that there is a preference for auditing when the auditor is a specialist in the client's industry, and there is a preference for consulting when the auditor provided consulting services in the past and the client is likely to require consulting services in the future. I also report empirical evidence on audit effectiveness and efficiency in cases where the auditor and its client discontinued the audit in order to maintain a consulting relationship. Although there was no impact on audit effectiveness, the auditor switches reduced efficiency as evidenced by significantly higher audit fees. This study is relevant to the current audit environment because public accounting firms that spun-off their consulting divisions around the enactment of SOX are in the process of rebuilding their consulting practices and must now choose between providing audit and consulting services to their clients. It may also be pertinent to European policy makers who are currently considering a proposal to limit auditors' ability to jointly offer audit and consulting services to the same client.

Diploma thesis is about modern approach to internal audit. This work covers theoretical knowledge and methodology of internal audit and includes a concept internal audit 2.0 by Ernst & Young. Practical part of this thesis includes application of internal audit on a small enterprise including a 2.0 approach. Goal of this thesis is implementation of methodology from internal audit including 2.0 by EY , and conclusions of internal audit in praxis.

The thesis deals with performance audit theory and practise. Performance audit consists in evaluating of economy, efficiency and effectiveness. It checks inputs, how they are used and if the intended target is achieved. The main goal of the thesis is to use the theoretical knowledge and do the performance audit of chosen entity. The partial goal is to find out how the performance audit works in reality especially in the Czech Republic.

Abstract Purpose: The primary goal of this thesis is to provide a deeper understanding of how big data affect professional judgment, audit efficiency, and perceived audit quality. It also aims to explore the effect of Big Data Analytics (BDA) on the skills and competence required by auditors to perform an audit in a big data environment. Theoretical perspectives: Theoretical concepts base on previous research and publications by practitioners and regulators on BDA, professional judgment, audit efficiency, and audit quality. Literature was used to derive the research gap and research questions. Methodology: A qualitative method base exploratory approach. A literature review was conducted to uncover areas of interest that require more research. The effect of data analytics on the audit was identified as a potential area for research; a focus on audit quality was chosen, including key factors that contribute to overall audit quality. The research is based on semi-structured interviews with auditors from big four audit firms in Sweden. Empirical foundation: Empirical evidence was generated through an interview with seven auditors at different levels of the professional hierarchy. Empirical data was analyzed using a thematic data analysis approach. Conclusions: The findings of this research show that using BDA in the audit methodology affect the required skills and competence by auditors to carry out audit engagement activities. More IT related skills and knowledge gaining prominent in the audit field. Implementing data analytics will not be efficient in the early stage but will save time as auditors become more familiar with the tools. Data analytics improve audit quality. Auditors use analytics to gain more insight into the client’s business and communicate such insights to clients. It was found that data analytics generate fact-based audit evidence. The visualization ability enables auditors to visualize and analyze audit evidence to guide their professional judgment and decision making. Key words: Big data, Data analytics, Auditors skills and competence, Audit process, Audit efficiency, Audit quality and Professional judgment.

The large accounting firms recently created U.S.-based audit support groups to advance efficiency and consistency by applying firm-wide methodologies and standard audit procedures in judgmental/routine accounting areas. These groups—hereafter called the centralized audit team (CAT)—service several engagements simultaneously and execute procedures independently without core teams' oversight. However, the core teams are required to review and finalize the CAT's completed assessments and audit conclusions. This authority can result in unintended consequences, such as the core team discounting the results of the CAT's testing, which can reduce consistency across engagements. I investigate this concern by conducting an experiment to examine if the core team's review of the procedures used by the CAT and the client's views about the CAT's evidence requests influence core team reviewers' evaluations of the CAT's work. I predict and find that dissimilarities between the nature and extent of audit procedures used by core teams in prior audits and those currently used by CATs create an association effect such that reviewers are more likely to disagree with the CAT's conclusions. Inconsistent with my prediction that core teams will feel the need to please their clients, I find marginal evidence that reviewers are more likely to agree with the CAT's conclusions when clients complain versus when clients do not complain about CATs' excessive evidence requests. I fail to find evidence of an interaction effect. This study contributes to existing research and practice by highlighting conditions that can affect firms' ability to obtain their anticipated consistency and efficiency goals because core teams may discount the CAT's audit approach. / Doctor of Philosophy / Audit clients hire external audit firms to evaluate their financial information and provide reasonable assurance to the public that the financial information is presented in accordance with U.S. accounting standards, the Generally Accepted Accounting Principles (GAAP). Once a client hires a firm, the firm assigns a core team to the audit engagement. The core team performs interim and year-end audit procedures to assess the client's financial statements. To ensure that core teams conduct a sufficient assessment that meets U.S.-based auditing standards, firms employ firm-wide audit methodologies and standard tools that aid auditors in planning, performing, and documenting their procedures. However, inspections conducted by the Public Company Accounting Oversight Board (PCAOB) indicate that some core teams do not adequately follow firms' methodologies, often leading to engagements that do not meet certain requirements in the auditing standards. These types of discrepancies identified during PCAOB inspections could lead to monetary fines and damage firms' reputations. To help combat these issues, audit firms have begun employing Centralized Audit Teams (CATs) whose objective is to assist core teams by using firm-wide methodologies to perform standard procedures on certain audit areas within engagements. By applying standard procedures to multiple audit engagements simultaneously, CATs have the potential to improve the firms' audit consistency and efficiency. While the CAT plans, performs, and documents its audit procedures in the assigned area, the core team remains ultimately responsible for the overall audit. Therefore, the core team must review the CAT's work to ensure they completed sufficient and appropriate procedures. Existing audit research documents that different conditions within an audit can affect reviewers' judgment. For instance, a reviewer is less likely to scrutinize and disagree with the preparer's audit conclusion when the reviewer is familiar with the preparer. In my dissertation, I examine if certain factors that occur during CAT audits impact core team reviewers' judgment, lowering the possibility that firms will achieve their audit efficiency and consistency goals across engagements. Extant research posits that some core teams choose to follow firm standard methodologies while others choose to deviate from the methodologies and perform client-specific procedures. Once the core team chooses to perform standard or client-specific procedures, it does not often change procedure type. Thus, the standard procedures that CATs employ may be similar or dissimilar to the procedures that core teams performed in prior years. In this dissertation, I conduct an experiment using experienced external auditors to determine whether the similarity between core teams' prior audit procedures and CATs' standard procedures impact core team auditors' judgments when reviewing CATs' work. I predict that core team reviewers will form favoritism towards CATs when CATs perform procedures that are similar as opposed to dissimilar to the procedures that their team utilized in prior years. Therefore, the core team reviewers will be less likely to scrutinize and disagree with the CAT's audit conclusion. Audit research also indicates that clients complain when auditors inconvenience them in hopes that the complaint will cause the auditors to behave in a manner that pleases them. For example, clients may complain when auditors ask them to provide a significant amount of evidence to support the reporting of a certain account balance. Since CATs follow standard procedures, they make similar evidence requests to all clients; however, these requests may differ from the core team's prior requests (i.e., clients should be more accustomed to the core team's prior requests). This dissimilarity may cause clients to complain. I predict that core team reviewers are more likely to attempt to please their client by adjusting a CAT's audit conclusion in a manner that favors the client when the client complains about the CAT compared to when the client does not complain. However, prior research also implies that reviewers are more likely to react to a client's complaint if they believe it is authentic. Therefore, I predict that core team reviewers are more likely to adjust a CAT's audit conclusion when the client complains about a CAT that conducts dissimilar versus similar procedures relative to the core team's prior procedures. The results of my study imply that when the CAT's standard audit procedures are dissimilar to the core team's prior procedures, reviewers are more likely to overrule CAT's audit recommendations by making significant changes to the audit results. These results are driven by the reviewer's perception that the CAT is more competent to audit the client's financial information accurately when the CAT uses similar procedures. I also find marginal evidence that when a client complains about the CAT, core team reviewers are more likely to agree with the CAT's conclusions even though the conclusions do not favor the client. I fail to find evidence that reviewers are even more likely to disagree with the CAT when the client complains, and the CAT's procedures are dissimilar as opposed to similar. My study sheds light on how CAT audit engagement conditions can influence core team reviewers' judgment. Given that firms have made significant investments to create and employ CATs, this dissertation provides insight to audit practitioners by highlighting engagement factors that lower firms' ability to achieve their related efficiency and consistency goals.

This thesis examines the factors affecting audit and non-audit fees and the effects of the joint provision of audit and non-audit services on auditing. The first essay focuses on environmental factors. Using data for Swedish listed companies over a six year span, including pre-crisis, crisis and post-crisis periods, the essay investigates whether changing economic conditions affect the level of fees paid for audit and non-audit services. The finding suggests that auditors increase their risk premium for auditing during a financial crisis andtend to charge higher audit fees as a response to lower risk levels in the post-crisis period. On the other hand, a significant reduction in non-audit fees suggests that companies are less willing to invest in consulting services during thecrisis and post-crisis periods. The second essay also studies the effects of environmental factors on audit pricing. Using data for financial institutions in 24 European countries, the study examines whether the level of effort spent on the evaluation of fair values is higher for more uncertain fair values.The result suggests that an increasing level of complexity and risk requires greater audit effort. Furthermore, the results showthat the strength of a country’s institutional setting is positively associated with the effort spent on the evaluation of high uncertainty fair value estimates. The finding implies that auditors spend more effort in stronger regulated countries, possibly due to higher potential litigation costs. The third essay focuses on the factors related to an individual audit partner. Based on the data of publicly listed Swedish companies, it investigates whether partner special competencies are reflected in the prices charged for auditing. The findings show that partner industry expertise and client-specific expertise are associated with higher audit fees. A further finding isthat female partners are considerably under-represented among specialists. However,the under-representation of females among higher qualified partners does not seem to negatively affect their possibilities to earn higher fees. The fourth essay investigates how the joint provision of audit and non-audit services affects perceived knowledge spillover and audit efficiency. The essay makesuse of survey data from a large sample of Swedish auditors and finds that the levels of communication and trust are positively associated with knowledge spillover. The result further suggests that the information gained from the provision of non-audit services can reduce auditors’ effort (time) spent on different audit procedures, thereby increasing audit efficiency.