This thesis has it starting point in the possibility for SME’s to deselect getting their accounts audited and what consequences this option can have for the SME’s.
For this thesis two questioners was developed. One for the SME’s that has the possibility to deselect getting their accounts audited which includes a range of questions covering their position to obligatory auditing as well as their understanding of the possibility to deselect auditing of their accounts and their relationship with the auditor.
The second questioner targets the auditors and covers how they see obligatory auditing for the SME’s and how they see their role in connection with the SME’s
Besides the two questioners, the thesis is based on a range of secondary materials. This includes relevant articles, debates, and comments on the subject. In addition, other relevant studies and analysis has been used. This secondary material is used to get an understanding on what view the surroundings has on the obligatory auditing rules of the SME’s. Especially the view of the politicians and other area experts are used to get an understanding of other stakeholder’s view of the relaxation of the obligatory auditing rules.
The thesis has shown that the SME’s in large scale has a large trust in their auditor and in addition in large scale leaves the choice of auditing method and statements to the auditor. These choices are primarily based on the SME’s not having enough knowledge of the meaning of getting their account audited or not and therefore put their trust in their auditor to choose the best option and most optimal option for the individual SME.
The thesis has also shown that the auditors wants to live up to the trust their clients are putting in them to make the right and most optimal choices but that there are a range of other factors that leads to the auditors using other types of statements than an official auditing statement. These factors includes the auditors wish to meet the clients expectations of a smaller invoice fee but also to minimize the impact of the auditors requirements for quality control.
Lastly the thesis has shown that there is a tendency to forget what impact the auditing of accounts and the auditor has as a control precaution in a public perspective. Therefore, it is easy to get the perception that the auditor and the obligatory auditing of accounts is only an expense to the SME’s that does not have reasoning. Instead one should focus on the advantages the obligatory auditing and the auditor creates for the SME’s financial reporting as well as the control measures the auditing is providing to the society.
In conclusion, the thesis has shown that auditing of the accounts are often deselected based on wrong incentives which again leads to some unwanted consequences of these choices.
The company incentives are based on the goal of saving money.
The auditors wishes to minimize their risk of making mistakes in the quality control which can lead to extensive fines and claims for damage from clients
Lastly the public in the presences of the Tax authorities and the Erhvervsstyrelsen have forgotten what is will mean to remove a control precaution which is the case the Auditing of accounts are deselected.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||134|
|Supervisors||Caroline Aggestam Pontoppidan|