Opting Out of Audit -What are the Swedish companies experiences?
Abstract: Background and Problem: Recently there has been a relaxation process regardingaudit regulations going on in EU. The goal was to lessen the administrative burdensby 25 % by 2012. As a response to this the Swedish government decided to abolishthe statutory audit for small companies in 2010. Many European countries have comefurther in their relaxation process but the real effects of the Swedish change inlegislation are as yet unknown.Aim of study: This thesis has investigated whether expectations stated by differentactors prior to the change in legislation, from a small companies perspective, havebeen fulfilled. By applying generally accepted economic theories to the observedoutcomes the authors hope to explain and understand what have affected smallcompanies experiences.Methodology: Information regarding expectations was gathered by reviewing theposition on the topic given by different representatives and institutions prior to thechange in legislation. By using a web survey these expectations were then comparedwith the views of companies who had opted out of audit.Analysis and Conclusion: One of the main objectives with the changed legislationwas to increase Swedish companies global competitiveness by reducing cost andadministrative burdens. The research, however, found that the majority of smallSwedish companies did not operate on a global market. Despite this the companieshave made large cost savings even though many of them still employ complementaryservices similar to the services previously provided by the auditor. 85 % of therespondents claimed that they were satisfied with their decision to opt out of audit andthe vast majority did not consider missing out on any added value. The explanation tothe above, may be, that economic theories are often used to describe the purpose,benefits and demands of audit for big companies and therefor seems inadequate whenthe same principals are applied to small companies. The research points to an overallsatisfaction amongst the surveyed companies in their decision to opt out of audit,hence making the initiative successful.
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