The main purpose of this study was to explore the relationship between market and accounting measures of risk and the profitability of companies listed on the Frankfurt Stock Exchange. An important aspect of the study was to employ accounting beta coefficients as a systematic risk measure. The research considered classical and downside risk measures. The profitability of a company was expressed as ROA and ROE. When determining the downside risk, two approaches were employed: the approach by Bawa and Lindenberg and the approach by Harlow and Rao. In all the analyzed companies, there is a positive and statistically significant correlation between the average value of profitability ratios and the market rate of return on investment in their stocks. Additionally, correlation coefficients are higher for the companies included in the DAX index compared with those from the MDAX or SDAX indices. A positive and in each case a statistically significant correlation was observed for all DAX-indexed companies between all types of market betas and corresponding accounting betas. Likewise, for the MDAX-indexed companies, these correlations were positive but statistical significance emerged only for accounting betas calculated on ROA. As regards the DAX index, not every correlation was positive and significant.

This paper develops a new method for measuring market risk called downside accounting beta (DAB). To test the validity of DAB the method is applied to the financial data for 14 food companies listed on the Warsaw Stock Exchange during a 6-year period. DAB calculates how changes in the profitability of the whole sector affects the profitability of a given company. The paper concludes that when calculating DAB using Return on Assets (ROA) and Return on Equity (ROE) there is a positive correlation with market betas. The practical implication of this research is that investors, owners and managers can use DAB to calculate the systematic risk of companies not listed on stock markets and consequently to identify the levels of risk associated with companies within the sector.

A study was conducted of 15 food companies listed on the Warsaw Stock Exchange. The profitability of companies was measured by: return on assets (ROA), return on equity (ROE) and return on sales (ROS). Investment risk was measured by standard deviation and semi-deviation. The main objective of the study was to examine whether the average level and variability of selected indicators of profitability are reflected in the average level and the variability of returns on the capital market. An additional aim was to examine whether the size of the company affects the profitability and risk of investment in stocks as well as the average value and the volatility of profitability ratios. A positive correlation between the average value of the profitability ratios (ROA and ROS) and the average rates of return on the capital market was identified. Similarly, companies with higher volatility and semi-volatility of profitability ratios were simultaneously characterized by larger fluctuations in rates of return on the stock market. Studies have shown that the size of the company is negatively correlated with the risk of stock market investments and the volatility of profitability ratios.

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In recent years, many companies have been issuing non-financial information which is used by a wide range of stakeholders in their decision-making processes. Considering the fact that such reports play an important role in financial markets, the information they provide should be submitted to verification by an external, independent body. Our study, carried out in 2020, showed that only 2.3% of audit firms in Poland offer auditing non-financial report services. This was the starting point for our further investigations, the results of which will be presented in this article. The aim of the article is to identify the factors that limit or stimulate the performance of auditing in Poland with respect to non-financial data, and to determine the scope of operations carried out by audit firms which provide this service. The article comprises literature perusal and results of empirical studies among audit firms in Poland. Several important findings have emerged, including the fact that there are few companies in the Polish auditing market rendering the service of auditing non-financial reports, which are leaders in this field. The factor that most significantly limits the performance of non-financial report auditing is the low demand for such a service, which arises from the fact that verification and assurance of non-financial data are not obligatory for all reporting undertakings. Given that the number of CRS reports is increasing every year, it seems necessary to make full audits in order to confirm the reliability of non-financial information provided by reporting companies. Otherwise, stakeholders interested in these reports might be exposed to a risk of making inadequate decisions.