The Abrogation of the Statutory Audit -Effects on the Swedish Tax Authority from an Agency Theory Perspective
Abstract
Background and problem
The statutory audit for small LLCs in Sweden was removed in 2010. The Swedish Tax
Authority raised many concerns before the legislative change, but since then they have not
voiced their opinions regarding its effects. They lost a tool to ensure that the information that
they receive from the company is correct, but it is unclear how this has affected their work
processes.
Aims of study
The aim of this study is to investigate the Swedish Tax Authority’s current views on the
legislative change. Also, the subject of the value of the external audit and how it might have
an effect on the information asymmetry that can arise in the Principal-Agent relationship
between the Swedish Tax Authority and the Swedish LLCs.
Research questions
How has the abrogation of the statutory audit for small LLCs affected the Swedish Tax
Authority?
Is the external audit useful to redress the information asymmetry between the Swedish Tax
Authority and the Swedish companies?
Methodology
A qualitative study with individual interviews with five employees at the Swedish Tax
Authority and one interview with the Chief Legal Officer at the Swedish Companies
Registration Office. In addition to this a selection of articles, on the value of audit as well as
on the subject of the abrogation in different EU member states, have been studied.
Analysis and conclusion
The abrogation of the statutory audit has not affected the Swedish Tax Authority as much as
they feared it would. The General Accounting Controls, that were concurrently implemented,
is perceived to be more beneficial than the external audit. The most important tool to redress
the information asymmetry is a continuous contact between the company and an objective
external party with relevant knowledge in accounting and in the company. It is of less
importance whether this person is an external auditor or an accounting consultant.
Degree
Student essay
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Date
2013-06-14Author
Göransson, Charlotte
Lind, Louise
Keywords
Statutory Audit, Tax Authority, Sweden, Small LLCs, General Accounting Controls
Series/Report no.
Externredovisning
12-13-66M
Language
eng