The influence of the auditor-CFO relationship on the audit of goodwill impairment tests and possible write downs: A study of four Swedish listed companies
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
The objective of IAS 36 is to guide a company on how to apply procedures to ensure that its assets are carried at no more than their recoverable amount. The standard IAS 36 is however obscure and full of gaps to be filled with assumptions made by the CFO. Considering the obscurity of IAS 36, the audit of goodwill impairment tests and possible write downs can have different outcomes depending on the relationship between the auditor and CFO. This paper contributes to the literature by investigating how the auditor-CFO relationship influences the audit of goodwill impairment tests and possible write downs. The primary data consist of eight semi-structured interviews with four auditor-CFO pairs, in four Swedish listed companies. The auditor- CFO relationship and related negotiations are found to highly influence the audit of goodwill impairment tests and possible write downs. The findings indicate that the respondents view the auditor-CFO relationship as being proactive. Depending on what role the auditor is ascribed in the relationship by the CFO, the goodwill impairment tests and possible write downs have a different outcome, where optimistic values of the impairment tests are either upheld by implementation of relevant strategies or write downs are conducted.
Place, publisher, year, edition, pages
2014. , 53 p.
Auditor, CFO, Relationship, Negotiation, Goodwill, Impairment test, Write down, IAS 36
IdentifiersURN: urn:nbn:se:uu:diva-226787OAI: oai:DiVA.org:uu-226787DiVA: diva2:727308
Master Programme in Accounting, Auditing and Analysis