Non-Audit Services - Just Unjust? : Practitioners and Regulators opinion divergence on audit quality

Sammanfattning: Background: Over the years the EU, the US and the rest of the world have experienced several devastating financial crises. As a result of the Great Recession and several accounting scandals the EU-commission added new proposals of regulations. The Commission carried out a proposal to restrict the non-audit services to audit clients with the purpose to achieve improved audit quality and a more competitive market, which was later approved by the European Parliament.   Purpose & Problem:  The purpose of this thesis was to evaluate how non-audit services to audit clients affect the audit quality and with that information evaluate the opinion divergence between the regulators and the practitioners, on providing non-audit services to audit clients and its effect on audit quality. Method: Our intentions were to compare collected evidence and earlier reports with fresh intake of raw data along with statements from several interview subjects from different positions such as the EU-commission and audit firms. By gathering information from both company personnel and state-working staff in the area of auditing, we obtained sufficient information on the thesis empirical findings we did also take part of professional bodies like IFAC and FAR.   Conclusion: Our conclusion is that both regulators and practitioners chose to define audit quality based on their own interests. We believe that this creates an opinion divergence. In order to resolve this conflict of interest, there is a need to agree on a universal definition of audit quality. To be more particular a definition that leave no room for ambiguities and misinterpretation regarding both practitioners and regulators.