Motivations and Incentives in Audit Firms - An Analysis of Intrinsic and Extrinsic Motivations as well as Provided Incentives for Auditors in Sweden

University essay from Lunds universitet/Företagsekonomiska institutionen

Abstract: Purpose: The purpose of this paper is to investigate motivational factors of auditors as well as inter-group differences. In addition, our study aims to answer whether the auditors' motivations match the incentives provided by the firms. Methodology: For this study, we chose a quantitative research method in form of surveys to auditors from eight multinational audit firms in Sweden as well as students with prospective careers in auditing. A descriptive approach is used in order to analyze the empirical findings. Two interviews with auditors within the Big 4 firms were conducted in order to get further insight and support our analysis and discussion. Theoretical perspectives: The theoretical framework is created by a number of theories concerning human motivation with a specific focus on intrinsic and extrinsic motivational factors. Furthermore, concepts and previous findings about financial and non-financial incentives as well as regarding the developments of Professional Service Firms, in particular audit firms, are outlined in more detail and build our theoretical foundation. Empirical foundation: Empirical results are based on surveys with auditors and students. Conclusions: Based on our results, intrinsic motivations seem to be more important for auditors than extrinsic motivations. More specifically, “Interesting Tasks and Enjoyable Job” appear to be the highest motivational factor. The findings illustrate further that Men are more motivated by “Financial Rewards and Benefits” than Women. Although, Non-Partners are “Less Motivated by Limited Autonomy”, Partners value “Responsibility, Independence and Initiatives” to a higher extent. Our results show that Non-Big 4 auditors tend to be more motivated by the possibility for “Non-Financial Rewards and Benefits” than compared to Big 4 auditors. Furthermore, Auditors are “Less Motivated by Limited Autonomy” than Students, which is supported by the result that Auditors are motivated to a higher extent by the chance for “Responsibility, Independence and Initiatives”. Regarding our findings for the alignment of motivations and incentives, it has been identified that the incentives do not cover the level of motivations, except from “Pressure from Employer”.

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