Analysis of financial indicators to evaluate the external auditor according to the Sherrod model

Abstract

The study aims to determine the relationship between banks' financial performance and the effectiveness of external auditors, by evaluating several financial indicators. The study used an analytical methodology that included data from a group of Brazilian banks over the period 2015-2022. The Sherrod model was applied to assess the impact of external audit quality on banks' financial performance, which contributes to improving financial management strategies. The results revealed a positive relationship between external audit quality and improved financial indicators, with banks that rely on more qualified external auditors demonstrating better financial performance. The study also demonstrated the importance of adhering to international auditing standards in enhancing confidence in financial statements.