The impact of MAS on perceived auditor independence-some evidence from Denmark

A large number of empirical studies have investigated the influence of MAS on the perceived independence of the auditor. Most of these studies were performed in English speaking countries and the majority found a negative impact. Sociological research reveals cultural differences between English speaking and Nordic countries, e.g. concerning the dimension 'masculinity'. Thus, an empirical investigation of the impact of MAS on perceived auditor independence in Denmark is promising. It was found that shareholders, bank loan officers and journalists perceive a negative effect on auditor independence if MAS are provided. The recent liberalization in Denmark is inconsistent with this finding. Furthermore, it was shown that the type of MAS influences the degree to which auditor independence is perceived to be impaired. Thus, independence rules related to MAS should be differentiated. Additionally, the study ascertained that perceived auditor independence does not increase if MAS are provided by a separate department of the audit firm. An internal separation of the auditing and the consulting function within the same audit firm is not viewed as being beneficial in Denmark.