Abstract

Title: Independence and Advisory Services in context of auditing

Authors: Vilma Nilson & Hannah Henriksson

Supervisor: Gunnar Wramsby

Auditing is an important part of the economic system that provides a seal of approval for the company’s financial statements. Auditor independence is a crucial aspect for the value of auditing. Auditing firms have, for a long period of time provided non-audit-services in relation to the auditing. There are both advantages and disadvantages when consulting is provided simultaneously with auditing services to the client. The advantage is that the auditor possesses a great knowledge about the firm, while the disadvantages can be the economic incentive that is created. The role of auditing is critical to societal functions, as it confirms the companies financial numbers. Therefore, it is also important that the stakeholders trust the auditor’s work.

Purpose: The purpose of the study is to investigate whether the auditor’s actual and apparent independence is affected when audit firms also offer advising, and how it is perceived by stakeholders.

Method: The study uses a qualitative method, along with interviews of both auditors and stakeholders. In the study, abductive research has been used.

Conclusion: This study shows that auditors work along the laws and guidelines that exist to ensure that independence is kept. The auditors do also have internal guidelines and yearly education that both remind and inform how they are supposed to work independently. Furthermore, the study shows that the stakeholders place trust in the auditing process and have no reasons to question the auditors independence. Stakeholders view the audit as a seal of approval.

Key word: Audit, non auditing services, actual independence, apparent independence, stakeholders