Audit Service Quality Perceived by Customers: Formative Modelling Measurement Approach

The imperative to measure perceived service quality by a formative model in which it represents higher-order formative construct, consisting of reflective first-order constructs ((sub)dimensions), is defined in leading marketing literature in previous years. That approach is of special importance since model misspecifications were often occurring in perceived service quality measurement researches, which may lead to totally wrong conclusions. Furthermore, when it comes to the perceived audit service quality, according to the knowledge of the authors, this is the first implementation of the described approach. Besides the analysis of perceived quality dimensions (all of them originate from intensively used SERVQUAL instrument and are adopted to audit service quality: tangibles, reliability, responsiveness, assurance and empathy), the model included relations between quality and client's satisfaction and loyalty. The results were obtained by processing 123 responses from Serbian companies. All dimensions of perceived quality influenced it positively and significantly (the strongest influence is related to assurance, followed by responsiveness; smaller coefficient with relatively similar value describes the influence of reliability; followed by empathy; the weakest is the impact of tangibles). Furthermore, research results pointed to the existence of positive relations between audit quality, satisfaction and loyalty. Hereby, satisfaction partially mediates the relationship between quality and loyalty.