Auditors Independence: How the current framework cover the threat to auditor's independence in the EU
Translated title
Auditors Independence
Author
Asif, Faizan Hassan
Term
4. term
Education
Publication year
2018
Submitted on
2018-07-31
Pages
82
Abstract
This thesis examines whether current European regulation adequately addresses threats to auditor independence, particularly those arising from non‑audit services. Using a qualitative approach that combines a literature review of academic and professional sources with analyses of well‑known scandals, the study focuses on the EU’s 2014 reform and three key measures: a fee cap on non‑audit services, prohibitions on certain non‑audit services, and mandatory auditor rotation. Perspectives from Big Four firms, small and mid‑sized practices, investors, and academics are considered, including responses to the EU Green Paper. Case studies of Enron, WorldCom, and Carillion (for fee caps/prohibitions) and Parmalat (for rotation) suggest these restrictions could have mitigated independence issues and potentially improved outcomes if applied in time. Overall, the findings indicate that the EU’s 2014 regulation represents a positive step toward a more resilient audit market. The study is delimited to the EU context (without country‑specific analysis), provides only limited treatment of directives, and does not cover U.S. GAAP.
Denne afhandling undersøger, om den nuværende europæiske regulering tilstrækkeligt imødegår trusler mod revisors uafhængighed, især fra ikke‑revisionsydelser. Med udgangspunkt i en kvalitativ metode kombineres litteraturgennemgang af akademiske og professionelle kilder med analyser af kendte skandaler for at belyse problemfeltet. Fokus er på EU’s reform fra 2014 og tre centrale tiltag: gebyrloft for ikke‑revisionsydelser, forbud mod visse ikke‑revisionsydelser samt obligatorisk rotationskrav. Afhandlingen inddrager synspunkter fra Big Four, mindre revisionsfirmaer, investorer og akademikere, bl.a. gennem reaktioner på EU’s Green Paper. Gennem case‑studier af Enron, WorldCom og Carillion (vedrørende gebyrloft/forbud) samt Parmalat (vedrørende rotation) vurderes, at disse begrænsninger kunne have afbødet uafhængighedsproblemer og muligvis forbedret udfald, hvis de var blevet anvendt rettidigt. Resultaterne peger samlet på, at EU’s 2014‑regulering er et skridt i den rigtige retning mod et mere robust revisionsmarked. Afgrænsningerne omfatter primært et EU‑fokus (uden landespecifikke analyser), begrænset behandling af direktiverne og ingen inddragelse af amerikanske GAAP‑regler.
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