On all Swedish audits on fiscal years starting 1st of January 2011 or later, the clarified ISAs should be applied. Before that, the Swedish auditing standards were called RS, which were a direct translation of the elder version of the ISAs but with considerations of Swedish law and Swedish traditions. The EC states that there will be no fundamental changes for the Swedish audits when the clarified ISAs is implemented, and IFAC states that all audits will realize significant changes when the clarified ISAs is implemented. The purpose of this study is therefore to explain how the audit process has been affected by the implementation of the clarified ISAs and what effects it has given rise to. The study also aims at explaining the relationship between audit firm size and impact on the audit process. This study was conducted using qualitative methods for both collecting and analyzing data. The data have been collected using both primary and secondary data. The primary data was collected through questionnaires in order to get as many opinions as possible but interviews were conducted as well in order to get a deep insight about the subject and to make sure that the questions in the questionnaire was relevant. What emerged in this study is that both the EC and IFAC were right about the implementation of the clarified ISAs in Sweden. The auditors that participated in this study explained that the way they are doing an audit has not changed, which means that no fundamental changes have occurred in the audits. However, the auditors have experienced some changes in the audit process, for example an increased amount of requirements on documentation and a more complicated and time consuming auditor’s report. How much the audit process has changed differs depending on the size of the audit firm. Generally, the impact on the audit process at the “big four” are less than it is on small audit firms due to the fact that many of the “big four” have worked with ISA before. Overall, the auditors have experienced that the implementation of the clarified ISAs have meant an increased cost for doing audits, in the form of updates in audit methodologies, educations and more procedures to perform. However, the auditors have not experienced that the audit quality has increased due to this. This means that the costs for an audit have increased while the quality remains the same.

<p>Background: Sweden has, since 1983, had a statutory audit for all joint-stock companies. However, according to EG’s fourth corporation directive, member countries can decide on their own if this applies for small joint-stock companies. An investigation was launched in the fall of 2006 to form an opinion on the importance of the audit reporting by law and what an abolishment of this rule would mean for small joint-stock companies. Critics are claiming that the cost of audit for small companies is exceeding the cause in these micro companies.</p><p>Audit is regulated by Swedish translation (RS) of International Standards on Auditing (ISA) and is to be applied in all companies comprised by the statutory audit. However, there is a statement about how RS should be adjusted to small corporations. Still, there are no apparent simplifications that may lower the cost of the audit.</p><p>Problem statement: We believe, with support from previous research, that there will be a demand from micro companies to audit. However, the auditing standards are not adapted to micro companies. This is why we’ve chosen to investigate what four accountants feel about the duty and an eventual simplification of the present audit process for micro companies.</p><p>Purpose: The purpose of this study is to investigate four accountants opinion on the abolishment of audit reporting duty and an eventual simplification of the present audit process of micro companies.</p><p>Method: We have used an inductive research approach and a qualitative approach to the investigation. We have used four interviews with accountants to launch the study.</p><p>Conclusion: The common opinion, irrespective of individual definition of the term ”simplification”, is that auditing can be made more cost efficient and adjusted to smaller joint-stock companies. The starting point should be present standards. However, what’s been done so far doesn’t seem to be enough.</p>

Background: Sweden has, since 1983, had a statutory audit for all joint-stock companies. However, according to EG’s fourth corporation directive, member countries can decide on their own if this applies for small joint-stock companies. An investigation was launched in the fall of 2006 to form an opinion on the importance of the audit reporting by law and what an abolishment of this rule would mean for small joint-stock companies. Critics are claiming that the cost of audit for small companies is exceeding the cause in these micro companies. Audit is regulated by Swedish translation (RS) of International Standards on Auditing (ISA) and is to be applied in all companies comprised by the statutory audit. However, there is a statement about how RS should be adjusted to small corporations. Still, there are no apparent simplifications that may lower the cost of the audit. Problem statement: We believe, with support from previous research, that there will be a demand from micro companies to audit. However, the auditing standards are not adapted to micro companies. This is why we’ve chosen to investigate what four accountants feel about the duty and an eventual simplification of the present audit process for micro companies. Purpose: The purpose of this study is to investigate four accountants opinion on the abolishment of audit reporting duty and an eventual simplification of the present audit process of micro companies. Method: We have used an inductive research approach and a qualitative approach to the investigation. We have used four interviews with accountants to launch the study. Conclusion: The common opinion, irrespective of individual definition of the term ”simplification”, is that auditing can be made more cost efficient and adjusted to smaller joint-stock companies. The starting point should be present standards. However, what’s been done so far doesn’t seem to be enough.