The Impact of Audit on Company Performance
DOI:
https://doi.org/10.46793/Rev26113.119ZKeywords:
audit, profitabilityAbstract
The aim of this research is to examine the impact of financial statement auditing on company profitability, measured by return on assets (ROA), while identifying the key determinants of financial performance in companies operating in Sector C – Manufacturing and Sector G – Trade in the Republic of Serbia, during the period 2023-2024. The research hypothesis was formulated that the audit of financial statements has a positive effect on company profitability. A multiple regression model was applied to assess the effects of selected independent variables on the dependent variable ROA. The analysis includes variables reflecting the key characteristics of companies’ size, current liquidity, indebtedness, the share of fixed assets, and the existence of a financial statement audit. The dataset analyzed comprises 200 observations, with sectors selected due to their significant role in the overall economic structure of the country. The results indicate that current liquidity, indebtedness, and financial statement auditing have a statistically significant positive effect on company profitability. In contrast, company size and the share of fixed assets do not exhibit a statistically significant impact on ROA. The findings suggest that efficient management of liquidity and financial structure, as well as transparency in financial reporting through auditing, represent key factors for improving profitability in the observed sectors. The results are relevant for company managers, investors, creditors, and policymakers, as they demonstrate that audited financial statements strengthen the confidence of external users of financial information, thereby enhancing the quality and reliability of business and investment decision‑making in the contemporary business environment of the Republic of Serbia.
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