<abstract xmlns="http://www.w3.org/1999/xhtml"><p>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.</p></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.

Concentration of the Audit Market: Evidence from Serbia

University of Novi Sad, Faculty of Economics Subotica, Serbia

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Concentration of the Audit Market: Evidence from Serbia"}

This paper presents a research on market concentration of audit services in the Republic of Serbia during the 2008-2011 period. Market concentration was...

Concentration of the Audit Market: Evidence from Serbia

Published Online: Mar 13, 2015

Page range: 115 - 126

Received: Jul 19, 2013

Accepted: Dec 20, 2013

DOI: https://doi.org/10.1515/ethemes-2014-0008

© 2015

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.