RESEARCH OF THE GLOBAL MARKET OF AUDIT SERVICES IN THE CONTEXT OF TODAY’S CHALLENGES

Purpose. The purpose of the research is to define the size of the global audit market in 2020, define the revenue of the Big Four for 2014–2020 and predict the amount of income for 2021; to determine how the crisis caused by Covid-19 has affected on the activities of the Big Four companies; perform a SWOT analysis of the audit market in terms of Deloitte, EY, KPMG and PwC; identify trends in the field of audit in 2021, knowledge of which will allow the Big Four to maintain their market position. Design/methodology/approach. The study examines the hypothesis of the effectiveness of global trends in the global audit market, with their possible implementation in the activities of the Big Four companies. The methodological basis of this study are general scientific, theoretical and special research methods that allow analyze all phenomena and processes in the field of auditing in interdependence. To solve the tasks in this study the following methods has been used: statistical and economic analysis, synthesis, logical generalization, comparison, forecasting, SWOT analysis, graphical and expert method. Findings. The study examines the activities of the Big Four companies in the context of today’s challenges. The dynamics of changes in the revenues of the Big Four companies for 2015–2020 and forecasts the total income of the surveyed companies for 2021 have been showed at the study. The authors determined the share of revenues from auditing in the overall revenue structure of each of the companies and graphically presented the revenue structure of the Big Four companies for 2019–2020. The authors developed a SWOT-analysis, which describes the strengths and weaknesses of each of the companies, as well as opportunities and threats to the environment. The authors also summarized the main trends in the global audit market, which were formed as a result of the crisis caused by Covid-19. Practical implications. The research could be used to adapt the experience of large companies in the recommendations for Ukrainian companies in the field of audit. Originality/value. Considering current crisis situation around the world, the results of this study are valuable for international audit companies and for Ukrainian as well, as it shows the main trends in the field of auditing. As organizations experience difficult economic times due to the effects of the Covid-19 pandemic, audit firms will need to prioritize their resources and demonstrate their value effectively in line with these new expectations in 2021. Covering automation and digital technologies such as research analytics, automated control testing, robotic process automation, and continuous risk assessment, auditing can forget about repetitive manual tasks and free up time for more value-added activities. As long as the Covid-19 pandemic continues, the changes caused by the pandemic will be felt for a long time. The experience of auditors in the field of risk management will continue to grow, as all companies will adapt to this new rule. However, despite budget cuts, new audit processes, and custom work, auditors will continue to be reliable business consultants and help companies thrive even in the face of growing threats and an uncertain future.

Impact of zero-mark-up medicines policy on hospital revenue structure: a panel data analysis of 136 public tertiary hospitals in China, 2012–2020

ObjectiveTo quantify the overall and dynamic effects of the implementation of the zero-mark-up medicines policy on the proportionate revenue generated from medicines, medical services and government subsidies at Chinese tertiary public hospitals.MethodsThe revenue data of 136 tertiary public hospitals from 2012 to 2020 and the implementation-time framework of zero-mark-up medicines policy of these hospitals were obtained from the institutional survey of the third-party evaluation of the China Healthcare Improvement Initiative. The study adopted the time-varying difference-in-differences method and combined it with the event study approach to estimate the effects of the zero-mark-up medicines policy.ResultsFollowing the implementation of the policy, the proportionate medicines revenue decreased by 3.23% (p<0.001); the proportionate medical services revenue increased by 3.48% (p=0.001); and the difference in the proportionate government subsidies revenue was not significant. In the year of implementation, the proportion of revenue generated from medicines decreased by 7.76% (p=0.0148); and that from medical services increased by 8.62% (p=0.0167). The effect of the policy gradually strengthened thereafter. In 2020, the sixth year after some hospitals started the implementation of the policy, the share of revenue generated from medicines decreased the most by 18.43% (p=0.0151), and that generated from medical services increased the most by 15.29% (p=0.0219). The share of revenue generated from government subsidies increased by 2%–5% in the second, third, fifth and sixth years following implementation (p<0.05).ConclusionsAlthough the policy goal of adjusting hospital revenue structure has been achieved, the findings were insufficient to conclude whether the policy goal of establishing a scientific compensation mechanism was met by increasing the price of medical services and government input. Additionally, whether there was an unexpected policy effect requires further analysis.

Forecasting Revenue Impacts from COVID-19: The Case of Florida Municipalities

Early in the pandemic, Florida municipal managers indicated that forecasting the impact on local revenues was one of their top priorities in responding to the pandemic, yet such a tool has not been widely available. This study offers simple and straightforward fiscal planning guides for assessing the short-term and long-term impacts of the COVID 19 recession on local government revenues by estimating the revenue declines among 411 Florida municipalities from FY 2021 to FY 2023. The forecast results predict revenues will be reduced by $5.11 billion from 2019 pre-pandemic levels for Florida cities in fiscal years 2021 through 2023. The decline is forecast to be 3.54 percent in FY 2021, 4.02 percent in FY 2022, and 3.29 percent in FY 2023. The revenue structure matters for estimating the revenue decline.

Revenue structure of the dual-role as investor-contractors in PPP project

Purpose The purpose of this study is to discuss the phenomenon of dual-role participants in public-private partnership (PPP) projects. Contractors who are also investors hold a dual-role that can improve project financing and technical ability. However, speculation without effort from the dual-role subjects can result in serious conflicts of interest between pure and dual-role investors. The authors considered contractors’ decisions regarding whether to invest and exert effort and discussed the distribution of interests between pure and dual-role investors based on different strategy combinations. The authors also analyzed the advantages and disadvantages of the dual-role phenomenon through the income model. Design/methodology/approach Based on game theory, this study constructed four types of revenue structure models for pure and dual-role investors in different decision-making choices. Then, the authors performed a comparative analysis of the dual-role participant’s income in different models. Findings When the contractor becomes a dual-role subject and expends significant effort (m1*), the revenue of stakeholders can be increased, which can achieve a win-win outcome. Meanwhile, the level of effort of the contractor can be guaranteed when the government or project company limits the investment proportion, rj. For a contractor, the channel of becoming a dual-role subject and expending effort is suggested for maximizing investment return. Originality/value The study optimized the PPP project system and investment structure and offered specific governance instruments for a PPP project company to prevent speculation by dual-role subject. Concretely, a dual-role subject was discussed in the context of PPPs; this discussion offers new insight for researchers. Four revenue models based on different contractor strategies were established, a finding that is beneficial for further improving the revenue governance of PPP projects. Finally, the study used a quantitative model to validate the advantages of the dual-role phenomenon, and the authors found that the proportion of equity can impact a dual-role investor’s effort level, thereby curbing speculation to produce a win-win outcome.

How to Maintain the Sustainable Development of a Business Platform: A Case Study of Pinduoduo Social Commerce Platform in China

At present, the ‘platform business model’ has indicated innovative potentials not just in traditional industrial sectors such as telecommunications, IT and retail, but also other sectors like social commerce. However, ‘Platform’ is not static as it is firmed at the beginning. Using Pinduoduo as a case study, this research conducts in-depth interviews and surveys in China to analyze the dynamic change of the platform provider’s role for successful platform operation via the lens of platform business models. As a “2.0 generation eCommerce platform”, Pinduoduo platform has become the largest social commerce platform in China with continuous growth at a high speed. The study found that stabilisation of the platform has experienced two stages: spread and evolution. At the spread stage, the role of platform provider focuses on forming “incentive to participants” through “Low price + Social contact” strategy and “Gamification + brand channel” strategy. At the evolution stage, the provider’s role is transformed into manager of products/services quality and revenue structure. Pinduoduo’s quality control is composed of three levels, including front-end quality control, middle-end quality control and back-end quality control. Besides, platform revenue structure strategies are sponsor-type. The purpose of this study is to enlighten the current players in the market on how they might utilize the underlying rationales in framework to further develop their platform business models. From the perspective of a platform, sustainable development of a theoretical framework is proposed based on these findings to facilitate future research in this area.