Determinants of Voluntary Audit Adoption in Finnish Micro-Companies

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master_Damskägg_Jaakko_2018.pdf (23.89 MB)

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School of Business | Master's thesis
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Date

2018

Department

Laskentatoimen laitos

Major/Subject

Mcode

Degree programme

Accounting

Language

en

Pages

86+7

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Abstract

This study examines drivers for voluntary audit adoption among Finnish micro-companies. More precisely, it is tested if customer demand and perceived tax benefits drive voluntary audit adoption. Furthermore, the study investigates whether plans on international expansion or intentions to sell the company in the future have a positive association with voluntary audit demand. The study is motivated by the proposal of Ministry of Economic Affairs and Employment to extend the audit exemption to cover all micro-companies. The data are gathered via an e-mail survey that was sent to micro-companies that are currently mandated to purchase an audit but would become exempted should the proposed increase in audit thresholds be effectuated. The empirical testing is conducted with a modified version of the model used by Niemi et al. (2012). The results show that customer demand for audit and perceived tax-related benefits arising from audit drive voluntary audit adoption. However, no evidence is found to support the hypothesized positive association between voluntarily opting for audit and plans on international expansion. Similarly, no association between voluntary audit adoption and intentions to sell the company in the future are found either.

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Thesis advisor

Ojala, Hannu

Keywords

financial auditing, audit exemption, micro-companies, audit regulation

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https://urn.fi/URN:NBN:fi:aalto-201810055242

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