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Profitability Analysis of Audit Firms – Evidence from the Republic of Serbia

In: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Hybrid Conference, Zagreb, Croatia, 9-10 September 2021

Author

Listed:
  • Mijić, Kristina
  • Rađo, Dijana

Abstract

This paper aims to provide an analysis of the profitability of audit firms in the Republic of Serbia during the period 2016-2018. The analysis is based on the data collected from the financial statements from all audit firms registered in the Republic of Serbia. The profitability analysis includes two goals. This paper will primarily provide a descriptive statistical analysis of the profitability of audit firms measured by return on assets and net income per employee. The following part of the research will answer the question of which factors have a significant impact on the profitability of audit firms. Profitability as a dependent variable is defined as return on assets and net income per employee, while independent variables include market share, current ratio, leverage, size, affiliation to the international network, etc. To answer this question, a regression statistics analysis will be conducted. The research result will indicate which factor can improve the performances of audit firms.

Suggested Citation

  • Mijić, Kristina & Rađo, Dijana, 2021. "Profitability Analysis of Audit Firms – Evidence from the Republic of Serbia," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2021), Hybrid Conference, Zagreb, Croatia, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Hybrid Conference, Zagreb, Croatia, 9-10 September 2021, pages 267-276, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    • Handle: RePEc:zbw:entr21:262253
    DOI: 10.54820/XJOO4690
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    References listed on IDEAS

    as
    1. Frecka, Thomas J. & Griffin, Jeremy B. & Stevens, Jennifer Sustersic, 2018. "Transparency and the audit industry? Not in the U.S. Evidence on audit production costs, profitability and partner compensation from the U.K," Research in Accounting Regulation, Elsevier, vol. 30(2), pages 73-81.
    2. Yahn-Shir Chen & Joseph Hsu & Mei-Ting Huang & Ping-Sen Yang, 2013. "Quality, Size and Performance of Audit Firms," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 7(5), pages 89-105.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    audit firm; profitability; financial statement;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

    Statistics

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