Do Big Four Auditors Matter? Evidence from a Comparative Statistical Analysis of Corporate Financial Indicators

This paper examines the role of external auditing in explaining differences in financial indicators as key mechanisms for assessing managerial efficiency and the financial health of companies. The focus is placed on the engagement of external auditors, with particular attention to the Big Four audit firms, and the differences in financial indicators among joint-stock companies in Bosnia and Herzegovina. Based on a sample of 143 companies, we analyzed differences in indicators of profitability (ROA, ROE), liquidity (current ratio), leverage (debt-to-equity), and efficiency (asset turnover). Due to deviations from normal distribution, non-parametric statistical tests (Mann–Whitney and Kruskal–Wallis) were applied to identify group differences.

The results indicate a significant difference in profitability between companies that are audited and those that are not, but no such difference exists between firms audited by Big Four and those audited by other audit firms. Statistically significantly lower leverage was found among companies using Big Four services compared to other groups, while differences in liquidity and efficiency were not statistically significant. The findings particularly provide empirical support for signaling and agency cost theories, according to which the presence of a reputable external auditor serves as an indicator of transparency and effective corporate governance.