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Dynamic panel analysis shows independent audit quality impacts profitability and market valuation in publicly listed companies, highlighting the strategic role of rigorous external auditing.
This study aims to examine the effects of independent audit quality (AQ) on firms’ financial performance (FP). For this purpose, the financial statements of 179 companies listed on the Borsa Istanbul (BIST) All Index for the period 2012-2024 were analysed.The independent AQ is operationalized by audit firm size (AFS), audit opinion and auditor rotation. FP, meanwhile, is evaluated via return on assets (ROA), return on equity (ROE) and Tobin’s Q (TQ). Leverage ratio and firm size were further used in the model as control variables. The analyses employed the dynamic panel data analysis method. The findings suggest that AQ influences ROA, ROE and TQ to varying degrees.
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Emel KILIÇBEY (2026) studied this question.
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