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Free to choose: Do voluntary audit reforms increase employment growth?
Högskolan Dalarna.ORCID iD: 0000-0003-2952-7327
Högskolan Dalarna, HUI Research.
University of Gävle, Faculty of Education and Business Studies, Department of Business and Economic Studies, Business administration.ORCID iD: 0000-0002-5043-6289
HUI Research.
2021 (English)In: International Journal of the Economics of Business, ISSN 1357-1516, E-ISSN 1466-1829, Vol. 28, no 1, p. 163-178Article in journal (Refereed) Published
Abstract [en]

Many European countries have abolished mandatory audits for small firms to reduce the regulatory and administrative burden for these firms. However, we still lack knowledge on whether such legislative changes affect employment growth for those firms that become free to choose to have external audits. We investigate this question using a Swedish reform that made audits voluntary for small firms fulfilling certain requirements. The reform created an almost ideal natural experiment, which we use to evaluate the effects of voluntary audits on employment growth for small firms using a difference-in-difference estimator. We find that firms which fulfilled the requirements for voluntary auditing, compared to a control group of similar firms that did not, increased their employment growth rate by 0.59%. This corresponds to 2,770 jobs being created in the year following the reform, suggesting that mandatory audits act as a growth barrier for small firms.

Place, publisher, year, edition, pages
Taylor & Francis, 2021. Vol. 28, no 1, p. 163-178
Keywords [en]
Auditing, firm growth, barriers, regulation, voluntary audit, Sweden
National Category
Business Administration
Research subject
Intelligent Industry
Identifiers
URN: urn:nbn:se:hig:diva-34003DOI: 10.1080/13571516.2020.1802963ISI: 000570781100001Scopus ID: 2-s2.0-85091035773OAI: oai:DiVA.org:hig-34003DiVA, id: diva2:1470194
Available from: 2020-09-24 Created: 2020-09-24 Last updated: 2021-01-27Bibliographically approved

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Hartwig, Fredrik

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CiteExportLink to record
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Citation style
  • apa
  • harvard-cite-them-right
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • sv-SE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • de-DE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf