Styrelsesammansättningens påverkan på revisorsarvodet
Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Introduction:By insight in the company and by monitoring the management, the board has an important function in creating trust in governance of the company. Furthermore, the board reduces the asymmetry of information between the owners and the management, which also is the function of the auditor, by auditing how the board governs the company and the accounting. In case the board does not effectively monitor the management, the auditor has to extend its monitoring, which increases the owners agency costs through the audit fee. The board composition can affect how effectively the board practices the monitoring
Problem: How is the audit fee affected by the board composition?
Purpose: The purpose of this study is to explain how the board composition affects the audit fee.
Method: The study uses a quantitative method, where the data was collected from the annual reports of 112 limited companies listed on the NASDAQ OMX Large and Mid Cap lists on January 2, 2012. Hypotheses were formulated to be able to test, and answer if there is a relationship between the composition of the boards and the fees for the auditors. Relationships, which could contribute to explaining the effect of the board composition on the audit fee.
Results and conclusions: The results of the study demonstrate that the composition of the board affects the audit fee. This due to the fact that the study showed that companies with a higher proportion of female and foreign board members respectively pay a higher audit fee than comparable companies. One explanation for this is that conflicts may arise in heterogenous boards, leading to that the auditor must increase his level of supervision. The increased supervision in turn leads to higher audit fee. The study also showed that companies, with the CEO as a member on the board, paid a higher audit fee. This since the boards’ monitoring ability decreases when the CEO is a board member. As a result, the auditor needs to enhance its supervision, which results in a higher audit fee. Thus it is the agency theory, which focuses supervision, the theory which best explains how the composition of the board affects the audit fees. This study may contribute by developing the theory of the boards’ and the auditors’ supervision and increase the understanding of how the board composition may affect the audit fee.
Place, publisher, year, edition, pages
2012. , 131 p.
IdentifiersURN: urn:nbn:se:lnu:diva-19028OAI: oai:DiVA.org:lnu-19028DiVA: diva2:529212
Business Administration and Economics Programme, 240 credits
UppsokSocial and Behavioural Science, Law
Yrjö Collin, Sven- Olof, Professor