De danske revisionsudvalg

Rikke Hjorth Larsen

Student thesis: Master thesis


After a series of global financial scandals, towards the end of the 20th century, the auditing industry's public credibility and the investor’s confidence in the capital markets weakened. There were raised questions if the quality and necessity of both auditors and the companies' corporate governance. This was reflected in the corporate governance debate, which contributed to an increased focus on listed companies' openness and transparency of quality information to the companies' shareholders and other stakeholders. The discussion about whether you could use a board committee to introduce a better system of checks within the company was introduced. Using Corporate Governance as an ethical code that sets and regulates the guidelines and recommendations for management behavior I conclude that some sort of control measure is needed to achieve greater transparency regarding management decisions in the management of a company. Corporate governance is used for reducing the asymmetric information flows that are inevitable in the separation of ownership and management. Corporate governance can help to ensure that the agent acts for the benefit of the principal in accordance with a "best practice" in situations which cannot be included in a contract. The concept of corporate governance can be seen as a dynamic entity, created by the development over time. The requirement for the establishment of an Audit Committee in listed companies in Denmark can be found in the Revisorlov, despite its role as a board committee and was made effective from the 31st of December 2008. Legally, it has not affected the responsibilities of the board that the Audit Committees have been put in affect. Even members of the audit committee, which may be regarded as experts in accounting and auditing have no increased responsibility in relation to the other board members. Nevertheless, these members in practice do have a particular expertise and insight into specific financial matters, than would otherwise be the case. Therefore such a board could, in some cases, be held responsible for any failures to act at an earlier stage than the other board members who do not have the specific expertise. This is due to the general fact that a person with a specific expertise in specific situations could have a knowledge that means that that person should have acted earlier than other board members. This thesis contains an overview of Danish listed companies’ establishment of Audit Committees in the third year after it has become mandatory for listed companies to have such. It is, although, still possible to let the full Board of Directors take the responsibility for the tasks of the Audit Committee. Via report holding information from 47 listed companies, it has been the objective to find out how the companies have decided to run their Audit Committees. After three annual financial reportings, it appears that Audit Committees in most Danish listed companies, is solely established to meet the statutory requirement of Revisorloven. The Audit Committees only meet the minimum requirements that are set in Denmark. However, it is expected that the companies and their bards over the years will form a kind of "best practice" for how the Audit Committee should solve the tasks they have been assigned. I expect and hope that companies will discover some possible options with having an Audit Committee and that they will establish their own requirements and tasks for their work. In this way they will be able to streamline the work of the committees and, hopefully, achieve a higher quality of their output.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2012
Number of pages64