Kristina Mijić

CONCENTRATION OF THE AUDIT MARKET: EVIDENCE FROM SERBIA

Abstract This paper presents a research on market concentration of audit services in the Republic of Serbia during the 2008-2011 period. Market concentration was measured by Herfindahl-Hirschman index (HHI) and concentration ratio CR4, based on four independent variables: operating revenue, net earnings, number of employees and number of audit clients. The research of market concentration based on operating revenue as the most referential variable indicated that the market for audit services in the Republic of Serbia has a moderate concentration and that it has the characteristics of an oligopoly of four largest audit firms known as “Big Four”. However, research of market concentration, when other variables are taken in consideration, does not reveal dominance of “Big Four” in terms of net earnings, number of employees and number of clients. The differences in conclusions when different variables are concerned can be explained by relatively high audit fees of “Big Four” and a lack of correlation between operating revenue and net earnings. Apstrakt U radu je sprovedeno istraživanje i analiza koncentracije tržišta revizijskih usluga u Republici Srbiji u periodu 2008-2011. godina. Koncentracija na tržištu revizijskih usluga merena je Herfindahl Hirschman indeksom (HHI) i Indeksom koncentracije (CRn) na bazi nezavisnih varijabli: poslovni prihod, neto rezultat, broj zaposlenih i broj klijenata revizije. Rezultati istraživanja koncentracije revizijskog tržišta na bazi poslovnog prihoda kao najreferentnije varijable ukazuju da tržište revizijskih usluga u Republici Srbiji ima umerenu koncentraciju i da ima karakteristike oligopola. Međutim, posmatrajući koncentraciju tržišta prema ostalim varijablama, uočava se da nije prisutna dominacija „velike četvorke“ po pitanju visine neto rezultata, broja zaposlenih i broja klijenata. Razlike između vrednosti pokazatelja koncentracije potvrđuju prethodna istraživanja tržišta revizijskih usluga u Republici Srbiji o nepostojanju korelacije između poslovnog prihoda i neto rezultata revizijskih firmi i relativno visokoj ceni revizijskih usluga „velike četvorke“.

TENDENCIES IN DEVELOPMENT OF EXTERNAL AND INTERNAL AUDIT IN THE PUBLIC SECTOR

Although they have different and clearly defined roles, the general purpose of external and internal audit in the public sector is to contribute to good governance of public funds, that is, efficiency, effectiveness and economy of public administration. As part of the numerous reforms in the public sector of the EU countries, as well as the Balkan countries, which began at the beginning of the 21st century, the external audit of the public sector (state audit) is developing an integral approach in its scope of work, which means providing attestations to the Parliament and the citizens of the state that the public funds are used effectively, efficiently and economically, and that the financial statements and operations of the public sector entities are in line with professional and legal regulations (emphasis is on the performance audit). The internal audit of public funds users, in addition to providing assurance services, is increasingly focused on advisory services with the aim of providing management with support in improving public resource and risk management, the efficiency of spending public funds and the provision of quality public services.

PROFITABILITY ANALYSIS OF MEAT INDUSTRY IN SERBIA

In this paper, profitability analysis of meat processing industry in Serbia was realized in period 2011-2015. Meat processing industry is one of the profitable sectors in the Republic of Serbia, with an average rate of ROA of 5.29. Even though companies in meat processing industry achieve positive net income, profitability is below referent value. In order to investigate which internal factors have a significant influence on the profitability of meat processing industry, a panel data regression was realized. The results show that companies with high liquidity ratio and growth in sales achieve better ROA. On the other side, high debt ratio negatively influences the level of ROA. Furthermore, the results show that the size of the company, fixed assets ratio and rate of investment, do not have an influence on the profitability of meat processing industry.

Similarities and Differences in Operating the Performance of Audit Firms in Serbia

Abstract Cluster analysis of audit firms in Serbia was carried out in order to assess the similarities and differences between audit firms. This analysis shows that “Big four” audit firms are significantly different from other audit firms by market position and human potential, but not according to net income. In addition, it can be noted that there are significant differences in observed performance indicators between individual audit firms.