What story do the transparency reports on the market for audit services tell? - The case of the Republic of Macedonia?

Abstract

The obligation for presentation of transparency reports by audit firms in the Republic of Macedonia was introduced for the first time with the amendments of the Audit Law in 2005. The intention was to demystify the operations of the audit companies. The first transparency reports were published in 2007. The compulsory elements of the transparency reports fully correspond with the requirements of the Eighth EU Directive. After ten years from the publication of the first transparency reports, a dilemma arises about what perception of audit quality of audit firms they create with readers. The paper consists of four segments. The first gives an overview of the literature and past research related to the transparency reports. The second segment focuses on the genesis of transparency reports observed through changes in the legislation. The third part analyzes the data from different segments of the transparency reports for all audit firms, with a special focus on the number of customers and the realized revenues from the offered services for the period of 2007-2017. The analysis should show the relationship between the number of clients and the revenues received by the audit firms grouped into three groups - "Big Four", Audit firms which are part of international network that does not belong to the "Big Four" and Local audit firms. In the last part the knowledge gained is summarized and the question initiated in the title of the paper about the readers’ perception created by the transparency reports on the audit firms activities is answered.