Independent thesis Advanced level (degree of Master (One Year)), 10 credits / 15 HE credits
Title: Auditors obligation to report suspicious crime – and how auditors perceive and
manage this duty
Level: Master level
Author: Susanna Winge
Supervisor: Fredrik Hartwig
Date: 2015-05-25
Background
The purpose of auditors has developed during the years, from ‘detecting crime’ to ‘ensure a
true and fair view’. Still, the ambitions of the politics were that auditors should be able to
prevent economic crimes, and also avoid accounting scandals. On January 1st 1999, it was
stated by law that auditors had an obligation to report clients if they suspected that any
crime has been committed within a company. According to the literature, auditors do not
have the right competencies to interpret what is a crime or just inaccuracies. Auditors do
also have an obligation to keep silence, towards their clients, which are described as a
cornerstone in their business. Earlier studies have indicated that auditors rather relate to
their confidentiality, because of their low knowledge regarding economic crimes.
Purpose
The purpose of this study is find out ‘How do auditors in Sweden perceive and manage
their obligation to report suspicious crime?’
Method
I have performed a qualitative study, where my primary data are sampled by nine, semistructured
interviews with auditors in Dalarna. The interviews were performed face-to-face,
and the questions were designed along the secondary data, in purpose to answer my
research questions and purpose. My secondary data consists of literature, Swedish laws and
propositions.
Result and conclusions
The result of this study shows that auditors do not make decision whether to reporting or
not. Despite it is the auditors obligation, it is the lawyers within their organizations that take
the decision if a report should be established or not. The respondents in my study consider
themselves to have the competencies and knowledge to discover errors, and therefore, they
do not need to posses the legal knowledge. My respondents think this is a difficult
obligation, but do not think the responsibility should be on someone else
Suggestions for future research
All respondents who participated in this study works at larger agencies, and have access to
competent lawyers within their organisations. I think this has affected my result, and
therefore I suggest a further study with auditors on smaller agencies, who not have their
own lawyers employed.
It would also be interesting to investigate stakeholder’s perspective and expectations about
auditor’s duty to report suspicious crimes, and perhaps even irregularities. It would also be
interesting to investigate why auditors do not acquire the competencies needed to establish
reports of economic crimes.
Contribution of the thesis
The contribution of this paper is that auditors do not need to posses the knowledge about
how to manage their obligation to report, because they have legally competent people
(lawyers) within their organization, who are responsible in these matters. Auditors perceive
this obligation as difficult, and leave the decision-making to legally competent people.
2015.
auditors, responsibility, independence, competencies, obligation to report, confidentiality, and expectations