Fremtidens revisionspolitik: Ønsket om øget kvalitet i revisionshvervet

Chrispin Niyongabo

Student thesis: Master thesis

Abstract

The subject of this thesis is the evaluation of whether the introduction of the European Commission’s legislative proposal regulation auditor’s work, will have the desired effect of increasing audit quality through increased independence. The proposal is evaluated mainly on theoretical perspective and supplemented with relevant stakeholders to the auditor’s work, and their view of the expected impact the proposal. The evaluation is split into two views, consisting of the actual and visible quality and independence of the audit profession. The results of a study of Danish accounting information users’ attitude towards rotation of audit firms is presented in an attempt to uncover the actual and apparent need in the Danish market. The review shows that rotation of audit firms in certain situations can improve the quality of audit performance, although the auditor is liable to loss of knowledge of the client’s business and the industry in rotating as per the proposal. In connection with the investigation of the thesis’ main subject, a need for a definition of the concept of quality from social science perspective was identified, as the aim in introducing the proposal in mention is to restore society’s confidence in the audit profession. The result her of is that in a social science perspective, there is somewhat of convergence in the definition of quality by individual stakeholders, as defined in the coalition model for accounting manufacturers, users of financial statements, regulators and auditors. Furthermore it was deduced that, as the theory of expectation defines, a gap lays in between the understanding and appreciation of the auditor’s work and quality and the actual purpose and work done by the auditor. An interview of a selected representative from the relevant stakeholders, users of financial statements as defined in the coalition model, is therefore used to investigate external rotation effect on actual and visible audit quality and independence. Overall assessment of rotation is that it can be effective in relation to the desired increase of the auditor’s de facto independence, but a closer examination of the apparent independence and practicality of rotation should be carried out in cooperation with the coalition partners to reduce the above mentioned gap in understanding and appreciation, among users of financial information. A thorough investigation will allow the coalition group to agree on the most effective approach to this apparent issue of lowered trust of the audit profession’s quality. This will be pivotal in avoiding the proposal by the European Commission becoming an instrument whose effect fades in time.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2014
Number of pages90