SERVICE QUALITY AS A DIMENSION OF AUDIT QUALITY

Audit of financial statements serves a public interest by providing credibility to financial statements. Therefore, it is mandatory for a certain of type of companies. Since it is a highly regulated and complex service, it is often perceived differently from other services provided to clients, especially in terms of its quality. It is common to emphasize the importance of the technical quality of the audit, which refers to auditor's ability to detect and report misstatements in audited financial statements. It is undeniable that this is the most important dimension of audit quality, since audit loses its purpose if audit users do not have confidence in the auditor's opinion. However, it should be taken into account that there is another dimension of audit quality, which refers to non-technical or service quality, as a dimension that is particularly important to internal audit users, i.e. employees of the client. Audit users that are in direct contact with auditors value their approach, confidentiality, reliability, etc., meaning that auditors' approach to each client can serve as a competitive advantage. Service quality as a dimension of audit quality has mainly been neglected, which may not be completely unintentional. Due to the fact that an increasing emphasis is placed on the auditor's independence, service quality determinants such as empathy and responsiveness might be potentially perceived as a threat to the technical quality of audit. This paper provides an overview of relevant definitions of audit quality and systematizes factors that make it challenging to reach a uniform definition of audit quality that would satisfy all stakeholders in the audit process. Since audit is a service provided to a client, previous general research on service quality determinants were explored. These researches served as a starting point in developing a proposed model of audit service quality determinants, which included five determinants: added value, reliability, responsibility, behavioral safety and empathy. Each determinant was further divided into three components. The validity of the proposed model was tested among auditors and audit users in Croatia, with the aim of identifying the most important components and comparing the attitudes of different groups of audit users. When observed at the level of all audit users, it can be concluded that audit users assign the greatest importance to confidentiality, accuracy and sharing knowledge as components of audit service quality. These components are assigned to behavioral safety, reliability and added value, as proposed determinants of audit service quality. When comparing mean values of internal and external audit users' responses, it is evident that internal audit users generally put greater emphasis on suggested service quality components than external audit users. Such results are expected, given that internal audit users are involved in the audit process and in direct contact with auditors. Statistical tests of differences in means have confirmed that there is a difference in the way internal and external audit users value suggested audit service quality components.