DO WE NEED THE TARIFF OF AUDIT SERVICES - THE STATE OF THE ART SURVEY AND PERSPECTIVES IN THE FUTURE

The purpose of this paper is to point out the necessity of improving the quality of financial statements audits in the Republic of Croatia through the establishment of minimum prices held in tariff of audit services that would result in stopping the degradation of the audit profession. The main objective is in the function of the purpose, and consists in identifying the determinants of audit fees in the Republic of Croatia and the analysis of the difference between charged fees and the amount of fees to be charged if the tariff of audit services would be employed, which will determine whether and to what extent there were changes in the amount of audit fees charged. The data from financial statements of 54 business entities whose securities were listed on the Zagreb Stock Exchange in 2009. and who have publicly released the amount of audit fees was analyzed. The further conclusion was drawn: The amount of audit fees largely depends on the size of the company and its profitability, while the influence of other factors related to characteristics of the client is less pronounced, or does not exist. It was found also that the amounts of audit fees depend on the size and location of the audit firm and that the abolition of tariff of audit services led to a lowering of fees charged for financial statements audit. Considering the amount of audit fees charged and the audit fees determinants, the adoption of tariff of audit services would prevent the degradation of the dignity of the auditing profession. But the minimum audit fees regulation is only one, although according to author’s opinion, very important factor of maintaining and improving the quality of audits of financial statements, while most other factors lies in the hands of the Croatian Chamber of Auditors that has to insure appropriate training and supervision over the auditors work.