The Effect of Auditor Reputation on the Profitability of the Bank

The purpose of this study is to assess the impact of different classifications of auditing companies on the bank's profitability indicators. The object of this study is the commercial banks of Russia. The research method is the regression analysis using linear models with fixed individual effects. The main data for the study was obtained from the database "Mobile", which contains various financial indicators of Russian banks from 2005 to 2016. The sample includes financial indicators of Russian banks, macroeconomic data, as well as information about auditing companies for 2014-2015. The fact that the auditing company belongs to the "big four" has a positive impact on the profitability of bank assets, and also has a negative impact on the bank's profitability indicator - in the next two periods. A large share of the market of the auditing company has a negative impact on the indicator of the bank's profitability in two periods. Moreover, the results have showed that the specialization of the auditor does not affect the profitability of banks.