Evaluate the efficiency of audit firms using data envelopment analysis

Data envelopment analysis is a suitable and useful technique for measuring and evaluating the efficiency of decision-making units. This technique is also an effective tool in evaluating the efficiency of units in auditing. Therefore, the purpose of this paper is to evaluate the efficiency of audit firms in terms of audit quality by using data envelopment analysis. Theoretical foundations and data of this study are based on library studies of the pharmaceutical industry of companies listed in the Tehran Stock Exchange. In this study, the output variable is audit quality and input variables include the number of partners of auditing firms, audit fees and auditing hours. The results, using the cross-functional method of data envelopment analysis, show that Behmand, Azmoodeh Karan and Arvin Argham Pars have the first to third ranks in terms of efficiency. Evidence from this study confirms that data envelopment analysis can be used as an appropriate method for analyzing the efficiency of audit firms in in order to assess the quality of auditors' work to support investors by financial analysts and capital market policymakers.