Begrænsning af ikke-revisionsydelser og rotationspligts påvirkning af det danske revisionsmarked for børsnoterede virksomheder

Christian Barrett

Student thesis: Master thesis


The European Commission published the Green paper ”Audit Policy: Lessons from the Crisis” in October 2010. This Green paper had rather radical suggestions for improving the European audit market and started an ongoing debate about how the audit market should be regulated. This thesis aims to study the effect on the Danish audit market for listed companies from the mandatory rotation proposal and restriction on non-audit services proposal. These proposals are the ones that I consider the most controversial and the ones that intervene the most when it comes to market competition and concentration within the audit market. This thesis has compared the current Danish legislation with the European Commission’s first draft for a new legislation published the 30.11.2011 and the JURI comities draft for legislation. The comparison has shown similarities and differences in the legislations. The first draft from the European Commission is rather restrictive while the JURI comities draft, having the same proposals, contain less stringent terms such as the mandatory rotations length. This shift from restrictive to more lenient may cause a less negative effect on the audit market if the decision to pass the new legislation is made. The thesis document analyses indicates that mandatory rotation will most likely have a negative impact on the audit market, seeing that barriers on the audit market such as reputation would mean the Big-4 will retain their current market shares and even win audit clients from the mid-tier audit companies. This effect contradicts the aim for the proposal, which is breaking the tight bounds between Big-4 and their clients so mid-tier companies can gain market share. While there are plenty of studies regarding mandatory rotation, significantly less evidence exists on the restrictions on non-audit services in the analyzed documents. This is rather odd seeing that USA, France and Belgium all have restrictions in their legislations; therefore studies regarding their experience should be available. The conclusion on the effect on the audit market from the restriction on non-audit services proposal is vague due to the lack of research studies to support it. The conclusion of the thesis is that the concentration and competition on the Danish audit market for listed companies, most likely will take a negative turn as Big-4 can gain even more market shares while the mid-tier companies can risk losing their current share of the market.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2013
Number of pages100